The U.S. dollar remained under some pressure on Wednesday as traders continue to bet on a return to interest rate cuts.
Markets see a potential for three more rate cuts this year after last week’s weaker-than-expected job market data and revisions affected sentiment.
In this regard, attention could remain on upcoming labor data, including jobless claims. The latter is expected to edge up to 221,000, and will provide another test of the labor market’s underlying strength. A material rise could reinforce expectations of a softer monetary policy and multiple cuts, weighing on the dollar.
Treasury yields could also remain exposed to any change in perception as new data comes out. The expected nomination of a replacement for departing Fed Governor Adriana Kugler could also affect sentiment. Yields could come under pressure if more evidence of a slowing economy materializes.
Leave a Comment