Analysis: Powell makes this week's US Non-farm Payrolls (NFP) particularly important; if labor market data falls short of expectations, it will significantly boost rate cut expectations.

On September 3, Antje Praefcke, a forex analyst at Commerzbank, pointed out that Powell emphasized the downside risks to the economy and employment in his speech at the Jackson Hole annual meeting—balancing the interest rate cut expectations of the U.S. government, markets, and Fed Federal Open Market Committee colleagues with the inflation risks that may arise from tariffs—the current focus on labor market data has far exceeded usual levels, and the weight of this data's impact will also significantly increase. This naturally means that if the labor market data falls short of expectations, it could further raise the Fed's interest rate cut expectations, potentially reigniting market expectations for one or more 50 basis point cuts. If this happens, the dollar is expected to face another significant blow. If tomorrow's ADP data comes in below expectations (market consensus is 80,000), it may lay the groundwork for this bearish sentiment towards the dollar—although this index ultimately has little predictive significance for Friday's US Non-farm Payrolls (NFP) data. (Jin10)