The US Dollar came under heavy sell pressure, especially against the Euro and the Japanese Yen, attributed by analysts to a plunge in yields on US treasuries. Growing concerns over the repercussions of the Coronavirus have shifted expectations that the Federal Reserve might move for another rate cut, perhaps even later this month. The fact that the latest 50 basis points cut was considered an “emergency” policy adjustment, traders and analysts alike believe that, at the very least, the Fed will telegraph its intent at the next policy meeting, if not make another outright rate cut. The uncertainty has led to traders' lack of faith and, as a result, they are fleeing from the almighty Dollar.
As of 10:37 am in Tokyo trading, the USD/JPY was trading lower at 106.1500 Yen, down 0.01% and off the session trough of 106.024 Yen; late on Thursday, the pair had hit a 6-month low at 105.96 Yen. The EUR/USD was also lower at $1.1228, a loss of 0.0214% and well off the earlier peak of $1.12423.
US Labor Data in Focus
Later today, the Non-farms Payroll Report from the US Department of Labor is due to be released. Currently, economists are predicting that the February numbers will show only 175,000 new jobs created, down from the 225,000 reported in the previous month. Average hourly earnings are also expected to have fallen, to 3% from 3.1%. Markets are wary of a surprise and will be anxious to see if the previous month's figures are adjusted.