Forex Today: US Dollar retreats on easing Fed rate hike bets, focus shifts to NFP
Here is what you need to know on Friday, September 4:
On Friday, September 4, the US Dollar experienced a retreat following easing expectations of a Federal Reserve rate hike, with market focus shifting towards the upcoming Nonfarm Payrolls (NFP) report. The US Dollar was the weakest against the Japanese Yen during the week, with the USD Index losing over 0.5% on Thursday due to cautious comments from Federal Reserve Governor Christopher Waller.
Waller's tone softened, with a lower FXS Speechtracker score of 6.1/10, indicating a slight reduction in hawkish policy rhetoric. The probability of a 25 basis points rate hike at the upcoming meeting decreased to 50% from around 63% earlier in the week, as per the CME FedWatch Tool. The US is expected to release NFP data, projecting a 56K increase in jobs for August, up from the unexpected 23K decline in July.
TD Securities expects only a modest currency response to a robust jobs report, estimating a +0.2% USD reaction if the NFP beats expectations by 40-50K. Meanwhile, Japanese Finance Minister Satsuki Katayama emphasized close monitoring of bond markets, and Gold rose nearly 2%, closing above $4,500. EUR/USD and GBP/USD showed positive movements, with EUR/USD gaining over 0.3% and trading below 1.1650, and GBP/USD edging closer to 1.3550.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
