Bitcoin price today: up at $118.5k amid US trade progress; remains rangebound
Investing.com -- Monday’s release of the U.S. labor market data for May showed robust figures, which according to Citi, are likely to sustain hawkish Federal Reserve pricing.
The good headline numbers, with 139,000 new jobs added and an unemployment rate (UR) of 4.2%, were strong enough to delay expectations of a weaker US dollar (USD). Citi’s US Economics team has revised its forecast for the first Fed rate cut, pushing it from July to September.
Despite the positive labor market report, Citi still anticipates asymmetric downside risks for the USD in the coming months. The firm suggests that the current data may be skewed by advance activities ahead of tariffs, potentially leading to weaker future economic performance. Furthermore, Citi notes that fiscal risks, ongoing tariff negotiations, and persistent policy uncertainty could trigger a new wave of selling in US assets and the USD.
Citi also indicates that, in the absence of a clear catalyst, the USD might experience a period of range-bound trading. The firm points out that foreign exchange volatility has decreased following the Nonfarm Payrolls (NFP) report this year, and average daily ranges tend to decline after the Consumer Price Index (CPI) release, as subsequent data in the month is generally considered less critical.
The report also highlighted potential underperformance in the Japanese yen (JPY), with cross-JPY pairs likely to benefit. However, Citi clarifies that this does not necessarily imply a pro-risk market environment, as even safe-haven pairs such as CHF/JPY and EUR/JPY are testing the upper ranges, with the potential for bullish breakouts.
In conclusion, while the US labor market’s strong performance in May has led to a more hawkish view on the Fed’s actions, Citi maintains the stance that downside risks for the USD persist. The firm emphasizes the need for patience as it anticipates a shift in hard data that could influence future USD movement.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.