Fed Hike Odds Drop After Soft US Data, Deutsche Bank Says
Deutsche Bank strategists note that a mixed US jobs report prompted a significant repricing of September FOMC expectations, with the implied probability of a rate hike declining.
Friday’s mixed Nonfarm Payrolls report triggered a notable shift in market pricing for the September FOMC meeting, according to Deutsche Bank strategists. Softer data drove futures-implied probabilities of a rate hike lower.
The repricing reflects reduced conviction that the Federal Reserve will tighten policy again next month, weighing on the US dollar. Analysts at Deutsche Bank highlighted the linkage between the disappointing data prints and the rapid adjustment in rate expectations.
The move underscores how sensitive dollar positioning remains to incoming US economic releases as the market debates the end of the hiking cycle.
Source: FXStreet Forex News