Forex
The US dollar started the week on the back foot, losing ground to other major currencies and approaching December’s lows. Investors have started pricing in a less aggressive stance from the Federal Reserve, following the release of jobs numbers on Friday that showed that, albeit unhurriedly, the US economy is starting to slow down. This cooling down is particularly noticeable in hourly earnings, which rose less than expected. Against this background, the consensus is that when the Fed next meets in February it will decide on a 25 basis points rate hike, rather than the 50 or 75 bp delivered at each of the last six meetings. This is scenario that is bearish for the US dollar, especially considering the improvement in risk appetite, following the reopening of China, which has also dimmed the greenback’s haven appeal.
Ricardo Evangelista – Senior Analyst, ActivTrades
