USD pulls back after testing 200-DMA – BBH

The USD retraced some of its recent gains after testing resistance at the 200-day moving average. Although no policy-relevant data is scheduled for release today, a full slate of Federal Reserve speakers—including Williams, Barr, Hammack, Waller, Paulson, and Musalem—could generate some market volatility, according to BBH FX analysts.

**Challenger Report Shows Surge in Job Cuts**

The Challenger October job cut report highlights soft labor market conditions in the US. US-based employers announced 153,074 job cuts in October, marking a 175% year-over-year increase and a 183% rise month-over-month. Challenger notes, “This is the highest total for October in over 20 years, and the highest total for a single month in the fourth quarter since 2008. Like in 2003, a disruptive technology is changing the landscape.”

For additional context, job cuts totaled nearly 1.1 million in the year leading up to October—the highest cumulative total since 2020—while hiring plans amounted to only 488,000, the lowest cumulative total since 2011.

**ADP October Employment Change**

The ADP October employment report overshot expectations, but labor demand remains weak. Private-sector payrolls rebounded by 42,000 (consensus: 30,000) after declining by 29,000 in September (revised up from -32,000) and 3,000 in August. Nevertheless, the average number of jobs added across August, September, and October was just 10,000 per month.

**Outlook**

We maintain our view that the Federal Reserve will deliver a follow-up 25 basis points rate cut to the 3.50%-3.75% range in December, with a 67% probability priced in by the market. Restrictive Fed policy risks further weakening the already fragile employment landscape, while upside risks to inflation remain limited.

**Bottom Line:** The USD is expected to come under renewed downside pressure in the near term.
https://bitcoinethereumnews.com/finance/usd-pulls-back-after-testing-200-dma-bbh/

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