Shifting Fed Outlook Adds Weight to Dollar Downturn
Recent revisions to U.S. labor market figures have sent ripples across financial markets. Evidence suggests monthly job gains since April may have been overstated by around 60,000, indicating that the labor expansion has been significantly softer than headline numbers implied.
Stripping Away the Noise: Real Employment Trends Emerge
Once adjusted for statistical distortions, underlying job growth reveals clear signs of weakening momentum. With monetary policy still restrictive, this slowdown raises concerns about broader economic resilience, especially in the absence of strong private-sector demand.
Mounting Pressure for Easing Amid Independence Concerns
As inflation cools, calls for rate cuts are growing louder—not just from markets but also from political circles. This increasing pressure could influence the timing of policy shifts, potentially compromising central bank autonomy and accelerating the move toward looser conditions.
Dollar Faces Long-Term Drag as Euro Gains Ground
With U.S. rates expected to peak and decline, while the eurozone shows improving fundamentals, the currency landscape is shifting. Forecasts suggest EUR/USD could rise to 1.24 by late 2026, driven by divergent monetary paths and capital rotation into non-U.S. assets.
- Job data revisions expose fading economic momentum
- Persistent tight policy weighs on hiring and investment
- Changing rate expectations favor alternative reserve currencies
- Structural improvements in Europe support euro strength