FX Daily: Data Reclaims the Spotlight
Markets are shifting their focus away from geopolitical tensions, with Venezuela and Greenland taking a backseat. It's time for data to take center stage and drive market movements. Today, we have a trio of releases: ADP, JOLTS, and ISM services data, which could impact the dollar's trajectory.
The Venezuelan Impact Fades
Oil prices softened yesterday, yet they remain stable near pre-January levels. Equities continue their upward trajectory, and FX markets have moved on from geopolitical concerns. This post-Liberation Day sentiment reflects a reluctance to trade on headlines and a shift towards more optimistic views.
The dollar's recovery yesterday is likely attributed to seasonal inflows and a slight increase in front-end swap rates, rather than geopolitical factors. Unless the US intensifies threats against Greenland or intervenes further in Venezuela, markets will likely refocus on data in the coming days.
Data-Driven Dollar Dynamics
Today, ISM services data is expected to be soft, but the real market movers will be the ADP and JOLTS job surveys. Interestingly, ADP payrolls have consistently missed consensus estimates in seven out of the last ten releases. Given our dovish perspective on the US jobs market, we anticipate that US jobs data events may pose asymmetrical downside risks for the dollar.
Looking ahead, our short-term view on the greenback remains neutral to slightly bullish.
