Dollar dips ahead of data, Jerome Powell's speech

Dollar declined in European trade against a basket of major rivals for the first time in four days as markets shun new positions ahead of important US private sector employment data for November, and GDP data for the third quarter.

Fed Chair Jerome Powell is speaking later today on economic outlook, inflation, and the labor sector, and will provide important clues on the future of monetary policies. 

The Index

The dollar index fell 0.35% to 106.35, with a session-high at 106.77, after closing up 0.2% yesterday, the third profit in a row amid concerns about Covid 19 protests in China which drove up haven demand. 

Fed Rates

Markets now put a 67.5% chance on a 0.5% rate hike the Federal Reserve in December, and a 32.5% chance of a 0.75% rate hike.

The 0.5% rate hike chance is down from 75% in previous days, which changed after bullish remarks by several Fed officials.

Fed Statements

Fed Saint Louis President James Bullard said the ECB needs to raise interest rates by a bit more, while New York Fed President John Williams said the Fed needs to carry on its path of rate hikes.

Data

US ADP private sector employment index is expected to show an increase of 196 thousand new jobs in November.

US GDP for the third quarter of 2022 is expected to show a growth rate of 2.8% in the second reading, up from 2.6% in the preliminary reading.