The USD was flat as traders awaited the release of the NFP report today.
The currency has been declining for the last two days as the market incorporated comments from Jerome Powell while expectations continue to point toward interest rate cuts later this year.
As a result, the US dollar could come under additional selling pressure if job market data comes lower than expected, boosting anticipations of rate cuts.
Conversely, the euro moved in the opposite direction during the last few days and was slightly negative today.
Traders could continue to monitor economic data on both sides of the Atlantic to determine which central bank could start cutting interest rates first which could fuel volatility and uncertainty regarding the trajectory of the euro/dollar pair.
In this regard, the European Central Bank left its interest rates unchanged yesterday, reflecting policymakers’ concerns over inflationary pressures although it revised inflation projections downward for 2024 and 2025, anticipating averages of 2.3% and 2.0%, respectively, while projecting lower economic growth at 0.6% in 2024.
