This week, the dollar is experiencing a retracement amidst anticipation for the U.S. employment report, continuing the a

This week, the dollar is experiencing a retracement amidst anticipation for the U.S. employment report, continuing the adjustment in the strong dollar trend. The dollar index has been rising since March 8, identified as the recent bottom, through April. This rise is backed by a series of sticky inflation indicators, suggesting fewer rate cuts than the three anticipated this year as recently forecasted by the FOMC.

Yesterday, remarks by Fed Chair Powell, who did not deviate from his previous stance regarding the start of rate cuts within the year, and the U.S. ISM Non-Manufacturing PMI falling below expectations, spurred dollar selling. With the U.S. employment report this Friday gaining attention, it's noted as a timely moment for adjustments in the previously established dollar-buying positions.

For USD/JPY, the 152 yen level is acting as a ceiling. Movements in dollar buying and yen selling are being restrained due to intervention concerns from the government and the Bank of Japan. However, should tomorrow's U.S. employment statistics result be strong, it is anticipated to trigger dollar-buying movements in the market. With an increased caution for intervention, a significant rise in USD/JPY volatility is a possibility that warrants attention.

Upcoming in the NY market are the U.S. initial jobless claims (03/24 - 03/30), U.S. trade balance for February, and Canada's international merchandise trade for February.

Speaking events include the publication of the ECB meeting minutes from March 7, along with scheduled speeches and panel participation by several U.S. financial officials including Harker from the Philadelphia Fed, Barkin from the Richmond Fed, Goolsbee from the Chicago Fed, Mester from the Cleveland Fed, and Kashkari from the Minneapolis Fed.

Following yesterday's U.S. ISM Non-Manufacturing PMI, dollar selling has accelerated. With no significant indicators expected tonight, a change in the direction of the U.S. dollar is anticipated to follow tomorrow's U.S. employment statistics.