USD needs desperately a solid NFP to stem further losses – MUFG

The US dollar has continued to trade at weaker levels after falling sharply following keynote speech from Fed Chair Powell. A strong Nonfarm Payrolls report is needed to reverse the greenback’s decline, economists at MUFG Bank report.

Financial conditions continue to ease 

“The lack of strong pushback against loosening of financial conditions has given market participants the green light to continue chasing recent risk-on trends including a weaker US Dollar.”

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

“The developments leave the US Dollar in desperate need of a solid NFP report tomorrow to stem further losses.”