Think twice before drawing USD optimism from NFP report – Commerzbank
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After Friday’s US labor market report, the Dollar was able to make significant gains, at least initially. Ulrich Leuchtmann, Head of FX and Commodity Research, warrants caution.
“Since spring 2022, labor supply has increased, but labor demand has not. There are no job vacancy statistics for April. However, there is no reason to believe that the high number of new hires is anything other than a continuation of this trend: that vacancies are being filled. However, this would not argue for increased monetary policy pressure and thus for higher USD carry and a stronger Dollar. On the contrary. It would signal that wage pressures are likely to ease. And that, in turn, would reinforce the market view that last week’s Fed move was the last one.”
“My message to you, dear reader, is to think twice before drawing USD optimism from Friday’s numbers. I’m not.”
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