Dollar Lacks Momentum To Erase Weekly Losses

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The dollar has been rebounding since Thursday as dip buyers reemerged around 97.70 to push the USD index back above the 98.00 figure. However, the greenback remains negative on the weekly timeframes as the 98.60 zone caps the move towards the 99.00 handle that represents the immediate target for bulls at this stage. On the downside, today’s lows in the 98.30 region act as the nearest support. 

Of note, the currency failed to capitalize on a solid economic report out of the United States. Fresh data showed that the US economy created 431,000 jobs in March. The result missed expectations for a gain of 490,000, but other data confirmed strength in the labor market. As such, the jobless rate eased to 3.6% and the average hourly earnings rose 0.4% on a monthly basis and expanded 5.6% over the last twelve months. Furthermore, the February NFP reading revised up to 750,000 from 678,000.

Against this backdrop, EURUSD weakened just slightly in response to the data to notch intraday lows around 1.1035. Should the pressure intensify in the near term, the common currency will target the 1.000 psychological level strengthened by the 20-DMA that represents the immediate support. On the weekly charts, the pair is finishing higher but stays within a bearish trend, holding marginally above long-term lows seen last month around 1.0800.

Meanwhile, in his latest comments Fed’s Evans said he expects seven rate hikes this year and three hikes in 2023. He also highlighted that future developments may cause him to alter this assessment. The buck showed little to no reaction to the message, with the market is now pricing in a 73% chance of a 50 bps hike at the May 4 meeting.