"The dollar extended losses for a fourth straight session on Wednesday ahead of the January employment report. Recent data cast doubt on the strength of domestic demand. The latest retail sales reading showed no monthly growth, missing expectations for a moderate increase and signalling that consumers may be adopting a more cautious approach. If this cooling trend persists, it could reinforce expectations of monetary easing later in the year, weighing on both the dollar and treasury yields."
"While the ADP employment gauge improved modestly from its prior reading, the focus remains on the nonfarm payrolls release. Markets expect job creation to pick up to around 70,000 from December's 50,000, while the unemployment rate is projected to hold at 4.4%. A downside surprise would amplify concerns that labour market momentum is fading alongside softer consumption, potentially triggering renewed pressure on US assets."
"A downside surprise would amplify concerns that labour market momentum is fading alongside softer consumption, potentially triggering renewed pressure on US assets. Still, the cautious comments from Federal Reserve officials could act as a counterweight and limit losses for the dollar. Dallas Fed President Lorie Logan signalled confidence that further cuts might not be needed, while Cleveland Fed President Beth Hammack suggested the central bank can afford to remain on hold for an extended period."
The dollar fell for a fourth straight session as weak domestic demand indicators loosened upward pressure. Retail sales showed no monthly growth, suggesting consumer caution. Continued cooling could increase expectations for monetary easing later in the year and push down treasury yields. The ADP employment gauge improved modestly, but attention centers on nonfarm payrolls, where markets expect about 70,000 new jobs and a 4.4% unemployment rate. A downside payroll surprise would raise concerns about fading labor momentum and softer consumption, potentially pressuring US assets. Cautious comments from Federal Reserve officials could moderate dollar losses.
Read at London Business News | Londonlovesbusiness.com
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