The USD has fallen to new 2023 lows and levels last seen in June 2022.
Weak ISM and NFP data compliment slowing inflation data. Markets are now speculating on Fed rate cuts.
CPI data is due to be released on Thursday and could reverse the situation completely.
Monday’s session is off to a strong start, following on from Friday’s moves. Stock markets are higher and led by the Dax with a +0.8% rally, while currencies are higher against the US dollar which is trading at new lows under the December range. Everything now seems to be going right for risk markets as it seems the Fed now has a green light for a dovish shift – not only is inflation slowing, but the tight jobs market is easing and wage inflation weakened more than expected in Friday’s NFP report. The positive NFP was quickly followed by ISM Services PMI data which added to the bullish case for risk assets. It came in at 49.6 versus a…
