The FX market is increasingly concerned about the US economy. Hardly surprising therefore that USD is currently struggling. Economists at Commerzbank expect the greenback to remain under pressure.
Economic concerns affect USD
“If signs mount that the US economy is cooling significantly, the market might feel confirmed in its assumption that the US central bank might start cutting interest rates in the second half of the year, whereas the ECB for example continues to attract attention with reasonably hawkish comments so that rate cuts are not playing much of a role for now.”
“A data highlight is due on Friday in the shape of the labor market report. Even though the data is likely to point towards a relatively tight labor market, the report would probably have to be phenomenal to dispel the economic concerns on the market. Of course that cannot be excluded but we expect a further slowing in the number of new jobs. As a result USD should continue to struggle.”
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