The U.S. dollar found some respite overnight and traded relatively unchanged.
The Dollar Index had fallen four consecutive days on a mixed date, trade tensions and a chorus of Fed speakers that have hinted a rate cut is in the pipeline. Indeed, Federal Reserve Chair Jay Powell became the latest policymaker to indicate he is open to monetary policy changes in the face of low inflation and persistent trade worries.
The dollar’s “breather” has proved short-lived as the currency is falling across the board after poor economic data. ADP said that private U.S. companies only added 27K jobs in May, falling very short of the expected 185K gain. For perspective, the range forecasted by economists was 153-226K jobs. April’s print was also downwardly revised and could possibly foreshadow Friday’s Non-farm payrolls number.
Markit and ISM service data are set for release at 9:45 and 10 a.m., respectively.
The Bloomberg Dollar Index is now at a one-month low.
What to Watch Today…
- Markit and ISM Service Data
Complete Economic Calendar can be found here.
The Euro touched a seven-week high against the U.S. dollar yesterday on general greenback weakness. However, the common currency was unable to make further significant strides versus its American rival even after Euro-area PMI data beat expectations. A breakdown of the data continues to show worries in the manufacturing sector.
EUR/USD is pushing towards new highs at the time of writing following the poor U.S. jobs data released at 8:15 a.m.
The New Zealand dollar was the biggest mover of the G10 currencies overnight, gaining over a half a percent against the greenback following hawkish comments from central bankers. Notes from a speech last month published overnight showed that Assistant Governor Christian Hawkesby held that view that “New Zealand’s interest rates will remain broadly around current levels for the foreseeable future.” This contrasts with an increasingly bearish Reserve Bank of Australia who recently cut interest rates.