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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Analysis]: The US dollar index has stabilized its 50-day moving average, has the Fed interest rate cut been digested by the market?" Hope it will be helpful to you! The original content is as follows:
XM Forex APP News-On Thursday (September 4), the US dollar index (DXY) rose slightly, with an intraday report of 98.359, an increase of 0.25%, rebounding from the recent weakness. As labor market data are weaker than expected, market expectations for the Fed's interest rate cut in September have heated up. A key non-farm employment report will be released on Friday, which may confirm or overturn current policy assumptions, so market participants remain cautious. The number of first-time unemployment claims climbed to 237,000 last week, an increase of 8,000 from general expectations, indicating a slowing recruitment environment. Meanwhile, the ADP National Employment Report shows that the number of private employment increased by only 54,000 in August - far below the expectations of 75,000 and a sharp slowdown from 106,000 in July. These signals reinforce dovish sentiment in the bond market and forex markets. Traders digested expectations of the Federal Reserve's interest rate cut, and the decline in U.S. Treasury yields were affected by weak labor data, and U.S. Treasury yields for all maturities fell. The yield on the 10-year Treasury bond fell 2.1 basis points to 4.19%; the yield on the 2-year Treasury bond fell to 3.60%. However, long-term Treasury yields remain at high levels, with the 30-year Treasury yields remaining below 4.90%, reflecting lingering fiscal concerns around the world. According to data from the CME FedWatch, the market currently believes that the probability of the Fed cutting interest rates at its September 17 meeting is close to 100%, a sharp increase from 89% a week ago. The dollar rose slightly, but gains were limited. Although data pushed the market to dove, the dollar still recorded a slight increase on Thursday. The dollar's rise reflects traders' cautious attitude towards holding positions, not bullish confidence——Many traders choose to wait and see and wait for Friday’s non-farm employment report to be released before taking action. Technical Outlook:
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