Market Analysis: Weak US employment data and interest rate hikes by the European Central Bank and the Bank of Japan may lead to a weaker dollar.

Morgan Stanley strategists noted in a report that the dollar could fall to new lows if upcoming US jobs data and decisions by the European Central Bank and the Bank of Japan lead to unfavorable interest rate differentials. They stated that a weak non-farm payroll report, likely to be released on Tuesday, could exacerbate market expectations of another Fed rate cut in at least the first quarter of next year. The ECB may leave room for a rate hike at its meeting on Thursday, while the Bank of Japan may raise rates on Friday and hint at further rate increases in the future. Overall, the convergence of interest rates between the US and other countries will "continue to play a key role in pushing the dollar lower." (Jinshi)