The U.S. dollar is mostly flat this morning after being down yesterday and making up for some of its losses throughout the afternoon.
Overview
Global equity markets are continuing their impressive rally, which could give dollar bulls headaches. The S&P has gained seven straight months and is up over 20% year-to-date.
However, the greenback is under modest pressure in early trading after this morning’s economic docket showed that American private companies added fewer jobs than expected. ADP said that U.S. firms added 374K jobs in August, after adding 326K in the month prior. While the headline seems impressive at first glance, the print is well below the 625K jobs estimated by economists. The disappointing read could possibly foreshadow a large miss for Friday’s Non-farm payrolls. Economists forecast that the American economy added over 700K jobs last month.
Later, U.S. manufacturing PMI will cross the wire at 9:45 a.m., followed by ISM manufacturing out at 10 a.m.
What to Watch Today…
- U.S. Manufacturing PMI at 9:45 a.m.
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EUR ⇑
The Euro is a touch higher overnight and has extended those gains after the U.S. ADP miss. The Euro has found support as global risk appetite has stayed strong and as a number of European Central Bank members have made hawkish comments as of late. Most recently, Bundesbank President Jens Weidmann said European Central Bank officials shouldn’t disregard the risk that inflation could accelerate faster than currently anticipated.
The ECB will meet next week amidst intensifying debate over whether the central bank should begin discussing removing monetary stimulus.
AUD ⇑
The Australian and New Zealand dollars were the biggest winners among G10 currencies. The Aussie rose nearly half a percent after data showed that country’s economy expanded faster than forecast in second quarter. The data backs up the Reserve Bank of Australia’s contention that growth momentum is strong, despite Covid-19.
The New Zealand dollar is continuing its bounce as several lockdown measures were lifted for parts of the nation.
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