On Wednesday (June 11th), in the early Asian trading session, the latest price of the US dollar index was 99.14, up 0.11%, with the opening price at 99.04. The better-than-expected performance of the May non-farm payroll data has led the market to reevaluate the policy direction of the Federal Reserve.
Previously, weak ADP and ISM PMI data had pushed the probability of a rate cut in July to 32.8%. However, the latest non-farm payroll report shows that the job market remains strong and salary growth is firm, significantly weakening the possibility of a rate cut in the near future. The interest rate futures market has rapidly adjusted its bets, with a rate cut in September now becoming a more recognized time point.
Federal Reserve officials’ latest statements align with the data, emphasizing that the labor market still exhibits “resilient stability.” Although the growth rate of economic activities has slowed down, it is far from decelerating significantly.
This “lukewarm” economic situation provides the Federal Reserve with room to maintain a wait-and-see stance. Market analysis indicates that future policy shifts will be highly dependent on the coordinated evolution of inflation and employment data. Before the core PCE fails to decline continuously, the Federal Reserve may maintain a policy stance of “keeping interest rates high for a longer period of time.”
Technical Analysis of the US Dollar Index
The MACD histogram of the US dollar index has narrowed, with the fast and slow lines approaching the zero axis, indicating that the current momentum is neutral and weak. No clear bullish or bearish direction signals have been formed yet. Overall, the technical aspect has not yet confirmed the breakthrough direction. Traders are focusing on whether the exchange rate can effectively break through the 100 mark or fall below the support level of 98.35 to confirm a new round of trend.
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