DATA-INDUCED MARKET REPRICING SETS USD ON A LOWER PATH (BUOYS GOLD)
While this report’s focus leans more heavily on the technical analysis, it is only prudent to take into account the effect of recent dollar and Fed funds rate repricing this last week. On Thursday, strong jobs numbers from ADP data saw markets lift expectations of a possible 50 bps hike in February to around 45% resulting in a slight bid in the dollar. That of course was before the ISM services PMI data revealed that the largest sector of the US economy had just dipped into a contraction, immediately erasing prior dollar gains as the market repositioned once more, this time for a potentially more cautious Fed approach on the terminal rate.
