USD – The dollar hit highs not seen in more than four months against the euro, as investors speculated further over whether recent strong jobs data could be enough to push the Federal Reserve to soon start tapering its bond-buying program.
Bannockburn Global Forex argues that “the dollar is well bid, and it’s been well bid since the middle of last week. A combination of hawkish comments from several Federal Reserve officials and the second monthly increase of more than 900,000 jobs has reaffirmed what the market has suspected, and that is for a tapering decision to be made shortly.”
GBP – Sterling rose to an 18-month high against the euro, as signs of economic recovery and falling COVID-19 rates spur expectations of a far earlier interest rate lift-off compared to the Eurozone.
Zoom out from 1986 till now. You can see a clear down pattern with three distinct peaks. The third peak was a double-top 2016 and 2019. The DXY is set to descend back into a third trough. The key is the Fed balance sheet, now over 8T. They know as well as everyone that tapering would cause a cascading crash, especially now that congress is set to pass about 4T in new spending from both bills. At that is a conservative estimate. Only fools take head of the Fed speeches. They deliberately try to alternative between dovish and hawkish statements because in their hubris they believe this is how they can accelerate or break the economy.
braingirl1994
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The job report is bogus. It's just an estimate based on small sample size of high-frequency data. It always gets revised down a year later. Of course, the dumb media never notices and the politicians get to slide by on bad job performance. It's basically like faking your grades and then hiding the real result later. Nearly $4.5 Trillion in new spending is on the way. And then there is the small matter of the US defaulting on debt because Congress would rather crash the world economy just to spite themselves.