Dollar Weakens as Traders Await Payroll Data Revisions
The U.S. dollar hit its lowest point this year against the euro on Wednesday, influenced by expectations of crucial U.S. payroll data revisions and a speech by Federal Reserve Chair Jerome Powell. Pressure on the dollar also came from low U.S. bond yields, sparking speculation about future interest rate cuts.
![Dollar Weakens as Traders Await Payroll Data Revisions](https://devdiscourse.blob.core.windows.net/aiimagegallery/30_07_2024_04_47_12_9775089.png)
The U.S. dollar fell to its lowest level this year against the euro on Wednesday, as traders prepared for crucial revisions to U.S. payrolls data later in the day, and ahead of a critical speech by Federal Reserve Chair Jerome Powell later this week.
The dollar also dipped below the closely-watched 145-yen threshold and neared a multi-year low against the British pound. The decline was driven in part by falling U.S. bond yields, which reached their lowest point since August 5 after soft payroll figures heightened recession fears. "The reduced yield premium in the U.S. Treasury market has been a clear factor driving the USD lower," said Chris Weston, head of research at Pepperstone.
Market participants are bracing for another possible shock with the payroll data revisions due later on Wednesday. The original August 2 payroll report sparked expectations of a steep rate cut by the Federal Reserve at its mid-September meeting. However, recent stronger macroeconomic data has shifted those odds, now favoring a smaller rate cut. Powell's upcoming speech at the Jackson Hole economic symposium will be scrutinized for clues about future rate moves.
(With inputs from agencies.)
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