Treasury yields in the United States decrease, and the yield curve steepens. The Fed is expected to maintain rates in November. concentrate on US nonfarm payrolls Written by Gertrude Chavez-Dreyfuss Reuters, NEW YORK, Oct. 5 – Before the release of a crucial U.S. nonfarm payrolls report that might influence whether the Federal Reserve hikes interest rates again next month, the dollar dropped on Thursday, reflecting the decline in Treasury yields and giving the yen and euro some much-needed reprieve. A “degree of consolidation” was present in the dollar’s decline following recent significant advances, according to James McCann, deputy chief economist at abrdn in Boston. “Undoubtedly, the dollar appears to be a little bit pricey when seen over a longer period of time.
People may be able to earn from some trades after you reach such (high) levels. The same is true with Treasury yields. There has been some consolidation there, he continued. The dollar index, which measures the value of the dollar against a basket of six other currencies and is headed by the euro and the yen, dropped 0.4% to 106.34 on Friday as investors awaited the release of the September employment report from the U.S. Labour Department. Earlier this week, the dollar index had reached an 11-month high. In a Reuters poll, economists predicted a growth of 170,000 jobs, down from 187,000 the month before. It is anticipated that the unemployment rate will have decreased from 3.8% to 3.7%. Data released on Wednesday revealed that US private payroll growth last month was far lower than anticipated.
According to the CME’s FedWatch tool, money markets have priced in an 80% chance that the Fed will maintain its benchmark overnight interest rate unchanged, despite analysts’ assertions that more information is required to determine how quickly the U.S. labour market is cooling. These odds were 55% a month ago. Longer-dated U.S. Treasury yields retreated from 16-year highs, while the yen, which is frequently influenced by U.S. yields, increased 0.5% to trade at 148.39 per U.S. dollar. On Tuesday, it fell to 150.165, the lowest point since October 2022. The direction of what we have been experiencing in the currency market hasn’t changed, according to Amo Sahota, director at San Francisco consultancy firm Klarity FX.
To truly reduce some of that dollar intensity, “I think we have to see a much more significant decline in U.S. yields,” After falling to its lowest point of the year on Tuesday at $1.0448, the euro rebounded 0.4% to $1.0551. Peter Kazimir, a policymaker at the European Central Bank, stated that although the central bank would need to wait for further data before reaching such a conclusion, the rate increase last month was likely the final in its current tightening cycle. WATCH THE INTERVENTION After the yen broke above the 150-to-one threshold earlier this week, there was anticipation that Japanese authorities would intervene to strengthen the currency. However, Thursday’s statistics from the Bank of Japan’s money market suggested that this was probably not the case.
intervene. Japan’s Finance Minister Shunichi Suzuki reiterated that currency rates must move steadily and reflect fundamentals on Wednesday but declined to comment on whether Tokyo has intervened. The yen received assistance from falling oil prices in addition to lower U.S. Treasury yields, though traders anticipate that the relief would be fleeting. The chances of a Japanese invasion, according to UniCredit strategists, are still present given the yen’s current value. After declining on Wednesday to its lowest level since March, the value of the pound rose 0.5% to $1.2190 against the greenback. Ben Broadbent, the deputy governor of the Bank of England, said it was unclear if interest rates needed to rise further.
At 19:06 GMT, the currency bid prices at 3:06 PM RIC description YTD Pct High Bid Low Bid Last U.S. Close Pct Change Earlier Change Dollar-based session index $1.0548 $1.0505 +0.43% -1.54% +$1.0552 +$1.0500 Dollar/Yen 148.4000 149.1100 -0.48% +13.19% +149.1050 +148.2600 Euro/Yen 156.54 156.62 -0.05% +11.58% +156.7800 +156.1000 Dollar/Swiss 106.3300 106.7600 -0.39% 2.744% +106.8600 +106.3200 0.9129 0.9173 -0.48% -1.27% +0.9182 +0.9127 Dollar/Canadian 1.3715 1.3748 -0.23% +1.23% +1.3785 +1.3712 Aussie/Dollar $0.6370 $0.6325 +0.75% -6.51% +$0.6377 +$0.6324 Euro/Swiss $1.2193 $1.2137 +0.48% +0.84% +$1.2195 +$1.2108 0.8650 0.8655 -0.06% -2.19% +0.8674 +0.8647 NZD 0.9627 0.9632 -0.05% -2.71% +0.9647 +0.9613 Euro/Sterling $0.5965 $0.5913 +0.91% -6.03% +$0.5967 plus $0.5913 per dollar Dollar/Norway 10.9630 Euro/Norway: 11.0140 -0.44% +11.73% +1.0350 +0.9650 Dollar/Sweden: 11.5665 11.5436 +0.20% +10.22% +11.5971 +11.5290 11.0102 Euro/Sweden: 11.0626 -0.12% +5.79% +11.0748 +11.0022 11.6085 11.6221 -0.12% +4.12% +11.6355 +11.5848.