- The US Dollar Index holds ground ahead of key economic data from the United States.
- Traders await the ADP Employment Change, weekly Jobless Claims, and ISM Services Purchasing Managers’ Index due on Thursday.
- CME FedWatch tool indicates pricing in more than 99% of a 25-basis-point Fed rate cut in September.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is holding ground after registering losses in the previous session and trading around 98.20 during the Asian hours on Thursday.
The Greenback appreciates ahead of fresh labor market data that could shape the interest rate outlook. Traders await the ADP Employment Change, forecast to indicate slower hiring, along with weekly Jobless Claims expected to rise modestly. ISM Services Purchasing Managers’ Index (PMI) will also be eyed.
Attention will be shifted toward Friday’s data that could shape the US Federal Reserve’s (Fed) policy decision in September. Economists project US Nonfarm Payrolls to add about 75,000 jobs in August, while the Unemployment Rate is seen at 4.3%.
The US Dollar (USD) may lose ground as weaker-than-expected July JOLTS Job Openings boosted the odds of the Federal Reserve (Fed) rate cut in September. Job openings declined to 7.18 million from 7.35 million, marking the weakest level since September 2024 and missing forecasts of 7.4 million. The CME FedWatch tool indicates pricing in more than 99% of a 25-basis-point (bps) rate cut by the Fed at the September policy meeting, up from a 92% chance a day ago.
However, Minneapolis Fed President Neel Kashkari flashed another policy warning sign on Wednesday, cautioning that tariffs are pushing the consumer-facing costs of goods higher, resulting in climbing inflation figures. Kashkari also cautioned that the US economy is pivoting harder into a “soft landing” scenario.
Meanwhile, Atlanta Fed President Raphael Bostic said that high inflation remained the Fed’s main risk, but added that signs of labour market weakness still pointed to a single quarter-point rate cut this year.
Stephen Miran, the US Council of Economic Advisors (CEA) member, nominated by US President Donald Trump to fill a recently vacated seat on the Fed’s Board of Governors, pledged to uphold the Federal Reserve’s political independence if confirmed by Congress. Miran stated that his opinions as a Fed Governor would be based on “his analysis”, which has resulted in odd publications in the past.
