After the two latest testimonies by Federal Reserve Chairman Jerome Powell, attention is turning and markets are awaiting how the jobs report will affect the prospects of a cut in US interest rates in June.
In the first testimony on Wednesday, Federal Reserve Chairman Jerome Powell told the US House of Representatives Financial Services Committee that interest rate cuts would likely be appropriate later this year, if the economy develops broadly as expected. And once officials gain more confidence in the sustainable slowdown in inflation. Powell explained: We are not yet confident that inflation will return to the target set for it, and the upcoming data will determine the date of the US interest rate cut. The number of times the interest rate will be cut will depend on the next economic data. 

As for the second testimony on Thursday, Jerome Powell said before the Senate Banking Committee that the central bank is fully aware of the risks that tightening its monetary policy poses to workers, but he said that lowering interest rates will depend on the development of the economy, just as the bank expects inflation to continue to decline. 

Therefore, the markets are now in a state of anticipation for the American jobs report, which provides strong evidence about the health of the labor market in the United States, and is one of the main indicators that the Federal Reserve relies on in determining the appropriate monetary policy tools for economic developments in the country, as the report explains. The number of jobs added or lost by the non-agricultural sector during last February, as well as the unemployment rate in the United States, and the report is expected to have a significant impact on the currency and stock markets. Therefore, this report will be an important reference for investors and traders in the markets because it will give new pricing. For the existing possibilities about the future of interest rates in the United States
The importance of the report increased as it came after the testimony of the Chairman of the Federal Reserve, which was less aggressive than expected in the markets.

The expected scenarios are that if the US jobs data comes in less than market expectations, it will give a negative sign about the flexibility of the labor market in the United States, and the pressures on the Federal Reserve will ease, and as a result, the US dollar exchange rate will decline against a basket of global currencies, and revenues will decline.

If the data is better than expectations, then the US dollar may rise in the foreign exchange market, with US bond yields recovering.
 

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