USDIDX drops below 101 as investors weigh risk of softening US labour market💵

Futures on US dollar index (USDIDX) dropped below 101 today, after very mixed and mostly weak job market data published this weak (ADP, JOLTS, Challenger Report). Now full fx market attention is headed to Non-Farm Payrolls scheduled at 1:30 PM BST. Before the most important reading of the weak, we can observe rising demand on 'safe haven', negatively correlated with the dollar currencies such as JPY oraz CHF. USDJPY pair drops almost 0.5% today and Monday volatility between US Dollar and Japanese Yen may even increase due to Japan GDP reading scheduled at 00:50 AM BST on Monday 9 September.

USDIDX and USDJPY charts

USDIDX is traded at a mid-range of the price channel. Futures on US Dollar Index (DXY) dropped after very mixed US labour market readings. Lower than expected NFP may lead to test even 100 support level for USDIDX, ahead of Federal Reserve interest rates decision scheduled at 18 September.

Source: xStation5

USDJPY somehow repeats scenario from 2023, however further decline cannot be excluded; Federal Reserve will probably cut interest rates since September, while Bank of Japan have arguments for a 'sea change' in its ultra-dovish policy with a potential of rising interest rates from current levels.

Source: xStation5