(AOF) – The American currency experienced a volatile afternoon in the wake of American statistics. The dollar lost 0.30% to 1.0554 after hitting a session low of $1.063. It initially declined following the release of the jobs report in November. The non-agricultural sector created 227,000 jobs while 202,000 were expected. There were 36,000 in October. The unemployment rate stood at 4.2%, in line with expectations after 4.1% the previous month.
For Lombard Odier Investment Managers, this report “suggests a continuation of the current economic trend”, with the Fed “likely to continue its current rate normalization”. The possibility of a Fed rate cut in December “remains firmly on the table but must be viewed with nuance”, with the central bank now “very close to pausing its normalization process, waiting to see what will happen in the next economic cycle”, specifies the manager.
That report was followed an hour and a half later by a better-than-expected December consumer sentiment index from the University of Michigan. It stood at 74 in December, against a consensus of 73.1, after 71.8 in November. Inflation expectations over 12 months and five years stood at 2.9% and 3.1% respectively against consensus estimates of 2.7% and 3.1%. These statistics have perked up the American currency.
The probability of a 25 basis point Fed rate cut on Dec. 18 is approaching 90%, according to the CME FedWatch Tool.
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