TOKYO, April 6 (Reuters) – After a torrent of data this week, traders see how pivotal U.S. jobs data coming out on the stock trading holiday will affect Federal Reserve policy. The dollar rallied on Thursday, but remained near a two-month low as the US traded into consideration. pointed out the cooling economy.
Friday’s high-profile U.S. non-farm payrolls report, with many markets around the world closed, was disappointing services sector data from the Institute for Supply Management (ISM) and Wednesday’s private employment data. , and the US manufacturing slowdown in March. activities at the beginning of the week.
Poor economic data has led traders to scale back bets on how long it will be before U.S. interest rates remain in restrictive territory, while also reigniting recession fears.
This curbs risk appetite and makes traders seek safer assets.
The US Dollar Index gained 0.14% at 102.01 and fell to a two-month low of 101.40 in the previous session.
The Japanese yen also gained about 0.1% at 131.20 to the dollar, gaining some support from a safe-haven bid.
Meanwhile, the risk-sensitive Australian and New Zealand dollars fell 0.39% and 0.38% respectively.
“Weak economic data continues to weigh on investor sentiment and provoke a flight to safety,” analysts at Westpac said in a note to clients.
The risk-averse mood sent US stocks lower on Wednesday on the STX/, but US Treasuries rose and the benchmark 10-year yield fell to its lowest level since September. As bond prices rise, yields fall.
The 10-year Treasury yield lasted at 3.2958%, while the 2-year yield typically moved in step with interest rate expectations at 3.7605%.
“The interaction between sentiment on Fed policy and US economic data on interest rates will be key for FX,” said Ray Attrill, head of currency strategy at National Australia Bank.
In other currency moves, the pound fell 0.2% to $1.2437 and the euro fell 0.14% to $1.0891.
Signs of a weaker economy have fueled speculation that the Fed will reverse its policy of raising rates, and traders are expecting more insight when St. Louis Federal Reserve Bank Governor James Bullard speaks on Thursday.
Cleveland Fed President Loretta Mester, known as the hawk, said in an interview with Bloomberg Television on Wednesday that it is too early to know if the Fed will need to raise its benchmark rate at its next policy meeting in early May. said.
The US interest rate futures market now has a roughly even chance that the Federal Reserve will keep rates on hold at its next meeting, with a rate cut priced in as early as July through the end of the year.
Reported by Rocky Swift and Ray Wee. Edited by Edwina Gibbs and Jamie Freed
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