Dollar’s Do‑It‑It‑Now: Index Holds, Eyes NFP
Early in the trading day, the dollar index steadied out, picking back a touch of the dip it’d taken after Tuesday and Wednesday’s retreat. It’s like the greenback finally caught its breath after a short, shaky dance on the market floor.
But that calm was temporary – anyone who sat in on the Fed’s recent chatter would know why the market’s giddy competition isn’t over yet. Federal Reserve officials, from the Minneapolis Fed’s Neel Kashkari to Chairhip of Jerome Powell, kept throwing shade at the idea that interest rates will cut soon. The take‑away? If inflation is still stubbornly high, rate cuts might not happen this year.
Why the Fed’s words matter
- Neel Kashkari: “If inflation sticks around, no cuts.” – That means our dollars may not get a boost from lower rates.
- Jerome Powell: “Need more proof that inflation is easing toward 2% before cutting.” – The Fed is holding its horses.
Combined with a solid U.S. economy and inflation that still refuses to take a vacation, those comments are steering markets toward a new view of June being the first potential cut – and that cut could be as big as 75 basis points for the year.
The “heart‑beat” data below the horizon
All eyes are now on the Non‑Farm Payroll (NFP) report that’s due later today. The stakes? If March’s job number falls below the 200K consensus (slightly dropping from February’s 275K), the dollar could shrug and take a dip. On the flip side, if the numbers stay strong, the greenback might keep standing firm.
Why NFP matters: A Quick Primer
- It shows how many people have new jobs (excluding farm workers). More jobs = stronger economy = potentially stronger dollar.
- Lower numbers might scare investors into pulling out of a dollar‑heavy portfolio, giving the index some pain.
- Expectations about the Fed’s next move often line up with payroll changes.
So, whether the results are a big win or a mitt-sized miss, you’re looking at a possible roller‑coaster for the dollar in the next few hours.
