Analyst: If non-farm data is strong enough, bets on interest rate cuts may be reduced

In a report, Ipek Ozkardeskaya, an analyst at Swissquote Bank, stated that if the U.S. non-farm employment data released on Friday is stronger than expected, the dollar may rise as this would weaken expectations of at least a 50 basis point rate cut by the Federal Reserve this year.

She said that this could support the Fed's single rate cuts not exceeding 25 basis points in its remaining three meetings this year. She stated: "Strong enough data might even raise people's expectations that the Fed will only cut rates twice this year, for a total reduction of 50 basis points." She indicated that bets on interest rate cuts are more likely to be reduced rather than increased.