US interest rates hit new high as April Nonfarm Payrolls approaches

Data current as of 4/2/2024
Key points
US 10YR Treasury yield makes fresh year-to-date high
Powell says Fed not rushing to cut US interest rates
Federal Reserve Chair Jerome Powell emphasized a cautious approach to adjusting US interest rates, indicating the Fed's confidence in inflation declining before considering rate cuts. Powell's stance suggests a watchful yet optimistic outlook on the economy, affecting market sentiments and future interest rate predictions. By contrast, European bank officials recently shared their proactive attitude towards cutting rates - not wanting inflation to drop too sharply without lowering rates first.
Fed interest rate cut odds down to 59% in June
The likelihood of the Federal Reserve cutting interest rates in June has diminished, according to Fed Funds futures from the CME. With expectations now closer to 50/50, investors question just how long it will be until rates begin to fall. This adjustment in market expectations reflects broader economic analyses and Powell's recent comments on monetary policy, indicating a less immediate need for rate adjustments.
Nonfarm Payrolls expected at 200k in April
April's Nonfarm Payroll report for March is anticipated to show another strong reading of 200k new jobs. Strong employment figures in 2024 so far have bolstered Fed Chair Powell's stance on holding off interest rate cuts, underlining the US economy's resilience and the central bank's criteria for policy decisions.
US dollar approaching fresh highs in major forex pairs
The US dollar is nearing new peaks against major currencies, with EUR/USD falling below 1.0800, GBP/USD approaching 1.2500, and the USD/JPY closing in on 152.00. This appreciation reflects the dollar's strengthening position amid shifting interest rate expectations and robust US economic data, impacting forex trading and international financial markets.
How to trade economic events
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Trading forex requires an account with a forex broker like tastyfx. Many traders watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.
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