Another robust US non-farm payrolls report has seen the dollar rebound a bit, unwinding some of its losses earlier in the week and putting the DXY index on track to end the week near its highest level on the year. With FOMC members continuing to signal patience on the timing of rate cuts even as many other major central banks appear increasingly inclined to start cutting before too long, the dollar may well remain on the front foot in the near term. That said, with money markets now discounting a bit less than the 75bp of cuts in 2024 implied by the Fed’s dot plot, the bar is relatively high for another leg up in US interest rate expectations and, consequently, the dollar. Our base case remains that most of the key currency pairs will stay rangebound this year, with the dollar eventually easing back once the FOMC shifts more decisively towards rate cuts.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services