Select Language

USD: Resilience of dollar could quickly give way - MUFG

Breaking news

USD: Resilience of dollar could quickly give way - MUFG

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
update 2025.09.05 19:43
USD: Resilience of dollar could quickly give way - MUFG

update 2025.09.05 19:43

The US dollar has certainly shown some better resilience this week although the gains recorded yesterday have reversed so far today - a possible delayed reaction to the steady stream of weak labour market data ahead of today's nonfarm payrolls report. The DXY is still a touch stronger this week (0.3%) despite the fact that US yields have declined - very modestly admittedly (above 3bps on the 2-year).

Risks look to be skewed in favour of data pointing to greater weakness

"The obvious conclusion here is that the US rates curve has a lot priced - 120bps of cuts over the next eight FOMC meetings and hence the appetite to react to the weak jobs-related data so far this week has been muted. But there remains only 7bps of easing priced for three rate cuts this year and we certainly see scope for that emerging if the jobs data continues to deteriorate. An NFP print today close to zero or negative would see a third FOMC cut this year priced very quickly, which in turn would likely see the dollar renew its decline."

"There is a chance though that the dollar could see muted declines even in that scenario. The 10% drop of the dollar in the first half of the year was from very over-valued levels and while still over-valued the dollar is now at levels where external factors could play a more influential role in performance. The French confidence vote on Monday is likely to result in the collapse of the government that creates doubts over the appetite to buy the euro post-payrolls. "

The US dollar was helped yesterday by the fact that the overall ISM Services index jumped more than expected. In particular, the New Orders index jumped sharply, to above the 56-level for the first time since last year. But once again, like with the ISM Manufacturing report, while many measures showed some recovery, the Employment indices of both were weaker than expected. The ADP employment report was weaker too as was the JOLTS report - so risks look to be skewed in favour of data pointing to greater weakness than expected.



Date

Created

 : 2025.09.05

Update

Last updated

 : 2025.09.05

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

USD/CNH to test 7.1500 before a pullback can be expected - UOB Group

There is scope for US Dollar (USD) to test 7.1500 before a pullback can be expected; 7.1600 is unlikely to come into view.
New
update2025.09.26 23:50

Fragile sentiment in the Copper market - Commerzbank

The price jump in Copper, temporarily rising by almost 5% in reaction to the news that the operator of the important Grasberg mine in Indonesia has declared force majeure on contracted supplies, demonstrates how fragile market sentiment is regarding the supply situation.
New
update2025.09.26 23:44

China FX Today: Yuan consolidates as markets eye PMI data

The offshore Chinese Yuan (CNH) was relatively stable on Monday near 7.14 against the US Dollar (USD).
New
update2025.09.26 23:41

USD/JPY: Any advance is likely part of a higher range of 149.20/150.15 - UOB Group

Further US Dollar (USD) strength is not ruled out, but any advance is likely part of a higher range of 149.20/150.15. In the longer run, USD could rise further to 150.15, with lesser odds of reaching 150.90, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
New
update2025.09.26 23:30

China's Gold Imports Declined in August - Commerzbank

Gold prices continue to climb, attracting strong ETF inflows, but high prices are weighing on physical demand as China's August imports fell 3.4% month-on-month and net imports from Hong Kong dropped 39%, Commerzbank's commodity analyst Barbara Lambrecht notes.
New
update2025.09.26 23:23

NZD/USD: Small chance of breaking below the next support at 0.5730 - UOB Group

New Zealand Dollar (NZD) could decline further, but it remains to be seen if it can break below the next support at 0.5730. In the longer run, the outlook for NZD remains negative; the next level to watch is 0.5730, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
New
update2025.09.26 23:16

GBP/USD edges higher as US Dollar eases after PCE and UoM sentiment data

The British Pound (GBP) gains traction against the US Dollar (USD) on Friday, with GBP/USD snapping a two-day losing streak. At the time of writing, the pair is hovering near 1.3393, staging a modest recovery after dropping to its weakest level in about seven weeks on Thursday.
New
update2025.09.26 23:10

Australia FX Today: Aussie awaits decisive RBA rate decision

The Australian Dollar (AUD) is consolidating against the US Dollar (USD) on Friday, with the AUD/USD pair stabilizing around 0.6530 after its recent fall.
New
update2025.09.26 22:55

EUR/USD edges higher as traders digest in-line US PCE inflation data

The Euro (EUR) edges modestly higher against the US Dollar (USD) on Friday, extending its intraday advance as investors weigh the latest US Personal Consumption Expenditures (PCE) inflation report, which came mostly in line with forecasts and offered little fresh impetus.
New
update2025.09.26 22:21

Fed's Barkin: Focus is now on balancing the Fed's goals

Richmond Federal Reserve President Thomas Barkin said on Friday that he saw limited risks of a sharp increase in either unemployment or inflation, which he argued would allow the Fed to balance its dual mandate as it considers further interest rate cuts.
New
update2025.09.26 22:15

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel