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Dollar uptrend holds as market bets on October rate hike fade
BBH points to a stalled dollar rally and bond selloff after FOMC officials tempered expectations for a possible back-to-back October hike, with September NFP due.
Brown Brothers Harriman’s Elias Haddad said the US dollar’s uptrend remains intact even after the recent dollar rally and bond selloff lost momentum. Haddad attributed the shift to FOMC officials trimming expectations for an October rate hike.
FXStreet reported that the newsletter highlights how the dollar’s gains, sparked by a hot August CPI print and reinforced by the Sept. 16 Fed hike, still have support from resilient US growth, strong labor demand, and sticky inflation into the September nonfarm payrolls release.
The note also cites Atlanta Fed GDPNow estimates of above-trend annualized real GDP growth of 3.7% in Q3 versus 2.2% in Q2. Ahead of the NFP data, consensus is for payroll gains of +90k, compared with +162k in August, while Bloomberg’s whisper number is +84k.
Timing for the report is also flagged, with FXStreet noting the September NFP release is set for 1:30pm London and 8:30am New York. The piece also references that ADP private payrolls and Revelio Labs employment are expected to inform traders ahead of the official figures.