Watching the dollar closely after recent jobs data, seeing divergence
The latest non-farm payrolls came in softer than expected, which you'd normally expect to see the dollar take a hit, but it's held up remarkably well against some crosses, especially the yen. We're still seeing that underlying inflation stickiness keeping the Fed on a tight leash, even if the employment picture is starting to soften. This makes me question the conventional wisdom of a rapid dollar decline. I'm keeping a close eye on $ZARJPY at 9.892, specifically for any sustained breaks below 9.853. On the equities side, I'm watching how sectors dependent on a weaker dollar are performing, particularly those with significant international revenue exposure, as the stronger dollar could present headwinds. It's not as clear-cut as some make it out to be. The market seems to be pricing in a 'higher for longer' Fed more aggressively than the jobs data might imply.
I'm seeing similar trends. The inflation narrative is definitely overriding some of the employment data's immediate impact on the dollar, suggesting a more complex reaction function than we typically assume. It'll be interesting to see if this divergence persists through the next CPI report.