Today, all eyes are once again on the US labor market report. Economists at Commerzbank analyze in which direction the USD will ultimately move.

FX market could react more sensitively to a negative surprise than to a positive one

A lot of optimism about a soft landing for the US economy already seems to be priced into the FX market, so even a small disappointment could trigger major price movements in the USD. 

By contrast, a positive surprise is likely to merely confirm market expectations and thus provide little additional support for the USD – unless, of course, the labor market report turns out exceptionally well.

After the USD rally of the last few weeks, the FX market could react more sensitively to a negative surprise than to a positive one.