The dollar faces challenges as the data maintains the possibility of a rate cut.

By flymultimediaghana Mar10,2024
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The dollar headed for its sharpest weekly drop of the year on Friday as Federal Reserve Chair Jerome Powell sounded more confident about cutting interest rates in the coming months, while the yen gained on mounting speculation of a rate rise in Japan.

The dollar faces challenges as the data maintains the possibility of a rate cut.
The dollar faces challenges as the data maintains the possibility of a rate cut.

The dollar saw minor losses against the majority of its major counterparts on Friday, and it was headed for its worst weekly performance versus the euro this year as a result of conflicting data that maintained the possibility of a Federal Reserve interest rate drop in June.

In its closely followed employment report on Friday, the labor department’s Bureau of Labor Statistics reported a 275,000 increase in nonfarm payrolls last month. A revision to the January data revealed only 229,000 jobs were generated, as opposed to the previously reported 353,000.

According to the report, the jobless rate increased to 3.9% in February, following three consecutive months of 3.7%.

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Stuart Cole, chief economist at Equiti Capital, stated, “I think the market has been getting a little worried that the Fed is stepping back from being in a position to cut rates soon, particularly given the recent inflation reports.”

He stated, “Today’s report should provide some optimism that things are still moving in the right direction to allow the Fed to cut this year, even if the scale of loosening will not be as strong as considered at the beginning of the year.”

Cole went on, “I think the dollar will be trading on a softer footing, at least in the short term.”

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At $1.09425, the euro was down 0.06% compared to the dollar. The common currency saw its best weekly performance versus the US dollar since the week ending December 22. Earlier in the session, it reached an eight-week high and was up about 1% for the week.

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