Former Goldman Sachs strategist: The logic behind the dollar's decade-long rise is facing a reversal; the "non-farm payrolls" positive factor may turn into a negative one.
PANews reported on February 20th that, according to Jinshi, former Goldman Sachs strategist Robin Brooks believes the decade-long trend of the US dollar rising based on better-than-expected monthly non-farm payroll data is coming to an end. This marks a "system shift," with traders selling the dollar on strong US job market data. He stated that the market expects the Federal Reserve to cut interest rates, and if the Fed adopts a policy to limit long-term nominal yields, strong non-farm payroll data could lower real yields, weaken the attractiveness of US assets, and ultimately lead to a weaker dollar. Brooks said, "The market may have doubts about Trump's policies because they have been capricious and unpredictable. The Fed has also been repeatedly attacked." He was referring to President Trump's repeated calls for central bank rate cuts. He added, "All the moves are aimed at lowering interest rates, and I think that's what the market is subconsciously thinking about." As evidence of this phenomenon, the better-than-expected January jobs report released on February 11th had almost no boosting effect on the dollar; instead, it had the opposite effect.
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