The US dollar maintained a steady position as investors eagerly awaited the nonfarm payrolls report and assessed the implications of prolonged Federal Reserve interest rates on the economic growth outlook, Reuters reports.
Anticipation for Nonfarm Payrolls Report
Investors are keenly awaiting the nonfarm payrolls report, expected to show an addition of 225,000 jobs in June. This follows the data of July 6, indicating a surge in private payrolls and a moderate increase in new unemployment benefit claims, suggesting a resilient labor market.
Impact on Treasury Yields and Dollar
The labor market data led to a spike in US Treasury yields as investors speculated on further rate hikes by the Fed to curb inflation. This kept the dollar elevated in early Asia trade. The euro and sterling were lower against the dollar, while the New Zealand dollar recovered some of its previous session’s losses.
Market Expectations and Economic Outlook
Carol Kong, a currency strategist at Commonwealth Bank of Australia, noted that strong U.S. data boosted market expectations for an additional Fed rate hike. The bond market remains concerned about the impact of restrictive monetary policy on the US economy, with some expecting a recession later this year.
Read Also: Treasury Yields Spiking As Market Looks Ahead To Jobs Data, Raising Valuation Concerns
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