Buyers haven’t abandoned the dollar, but they’re not chasing it either. The price action suggests positioning rather than strong directional conviction ahead of Thursday’s nonfarm payrolls report.
Traders Position Ahead of Delayed U.S. Data
With the government shutdown now in the rearview mirror, investors are preparing for a barrage of delayed economic reports. Construction spending, trade balance figures, and the long-awaited September jobs report will hit this week.
While the return of data is welcome, several firms — including Goldman Sachs — warn that the numbers may be outdated and offer little clarity for the Fed’s next move.
That uncertainty is reflected in rate pricing. Fed funds futures now show just over a 40% chance of a 25-basis-point cut in December, down from over 60% earlier in the month. Recent soft reads from the private sector haven’t been enough to lock in a cut, and gaps in data have clouded the economic picture. Traders will be looking closely at the FOMC minutes for any signal of internal divisions on the path forward.
Cross-Currency Flows Offer Little Resistance
The dollar’s modest gains come against a mostly flat performance across the majors. The yen held near nine-month lows despite Japan’s surprise Q3 contraction, keeping intervention risks in play.
The British pound remains on watch following Friday’s wild ride, with U.K. inflation data up next. The Swiss franc eased off recent highs as equity markets steadied, trimming some haven demand.
