Dollar Stagnant as Futures Market Remains Stable

The US dollar's performance remains lackluster despite robust US employment figures. In August, non-farm payrolls surged by 162,000, three times the forecasted amount, while the unemployment rate held steady at 4.1%. These numbers alleviated FOMC officials' concerns that a rate hike could freeze the labor market.

However, the USD index is not capitalizing on this strong data. The reasons behind this stagnation lie in the stability of the futures market, where CME derivatives still forecast a federal funds rate hike in September with a probability of around 60%. Investors are awaiting US inflation data for August to gauge what the FOMC will do at its next meeting.

Meanwhile, Donald Trump has dismissed the idea that raising interest rates would calm the debt market and has called on the Fed to cut them. Finance Minister Scott Bessent believes that Treasury bond yields will fall as soon as the conflict in the Middle East ends and oil prices plummet to $40-50 per barrel.