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Dollar desperately needs a strong NFP to stem losses — MUFG

The US dollar has continued to trade at weaker levels after falling sharply following Fed Chairman Powell’s speech. MUFG Bank economists report that a strong Nonfarm Payrolls report is needed to reverse the dollar’s slide.

Financial conditions continue to ease

“The lack of a strong pullback against the easing of financial conditions has given market participants the green light to continue chasing recent risk trends, including a weaker US dollar.”

“The latest US economic data releases yesterday were also unfavorable for the dollar, showing a further loss of growth momentum in the labor market and a worrying drop in business confidence.”

“The events leave the US dollar in desperate need of a strong NFP report tomorrow to stem further losses.”

Source: Fx Street

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