00:00Valentin Marinov of Credit Agricole writing this quote key for the Fed rate expectations and thus the U.S. dollar outlook could be the unemployment rate assuming that the unemployment rate remains close to historic lows and the headline print does not disappoint. We think that many Fed related negatives are in the price of the U.S. dollar by now. Valentin joins us. He's head of G10 FX research and strategy at Credit Agricole. So in some ways that's an optimistic way of looking at things Valentin because there's a lot going on particularly
00:29around the Federal Reserve at the moment. What makes you say that perhaps the lows might be in for the dollar. Good morning. As highlighted I believe that a lot of Fed related negatives are indeed in the price of the dollar and the labor market data the upcoming payrolls on Friday could play a key role in that. It is the case that whereas the markets may want to focus on the headline print the key for the Fed outlook would be the unemployment or indeed how
00:59tight the labor market in the U.S. remains. So with that in mind I think the two rate cuts that the markets are pricing in for this year from the Fed followed by another three cuts next year is fairly dovish view already. We also think that the U.S. economy if you take a more longer term view is likely to prove more resilient than consensus is expecting. And that could mean that the Fed would disappoint the dovish expectations of the market have at the moment. So with that in mind
01:29I think that a lot of negatives already in the price of the dollar and assuming our scenario does play out the dollar should start recovering in late 2025 and early 2026.
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