Analysis: Powell Makes This Week's Nonfarm Payroll Data Especially Important; If Labor Market Data Falls Short of Expectations, It Will Significantly Boost Rate Cut Expectations

BlockBeats News, on September 3, Antje Praefcke, a foreign exchange analyst at Commerzbank, pointed out that in his speech at the Jackson Hole annual meeting, Powell placed particular emphasis on the downside risks facing the economy and employment—in order to balance the rate cut expectations of the US government, the market, and his colleagues at the Federal Open Market Committee, as well as the inflation risks that tariffs may trigger. Currently, labor market data is receiving far more attention than usual, and the impact of this data will be significantly heightened.

This naturally means that if labor market data falls short of expectations, it could further and significantly boost expectations for a Federal Reserve rate cut, and may even reignite market expectations for one or more 50 basis point rate cuts.

If this scenario occurs, the US dollar is expected to suffer another heavy blow. If tomorrow's ADP data comes in below expectations (the market consensus is 80,000), it could lay the groundwork for this bearish sentiment toward the US dollar—even though this index ultimately has limited predictive value for Friday's non-farm payroll data. (Golden Ten Data)