USD: Binary event today We rarely take cues from the ADP report for US payrolls expectations since the correlation between the two is unarguably weak. But yesterday’s ADP’s 99k print was the weakest since the reopening of the economy in 2021, as small businesses shed staff in August while medium and large businesses were hiring at a very modest pace. The ISM Services report was steady and in line with consensus at 51.5, but the employment sub-index dropped more than expected to 50.2. The news for the jobs market was ...

The dollar slid to a one-month trough versus the yen and a one-week low on the euro on Friday, as a mixed bag of U.S. job market indicators stirred caution ahead of a crucial monthly payrolls report later in the day. A report on Thursday showed the number of Americans filing new applications for jobless benefits declined last week as layoffs remained low. That helped allay fears that the labour market was deteriorating rapidly, after figures released the previous day showed private jobs growth slumped to a 3-1/2-year low in ...

Major Russian banks have called on the central bank to take action to counter a yuan liquidity deficit, which has led to the rouble tumbling to its lowest level since April against the Chinese currency and driven yuan swap rates into triple digits. The rouble fell by almost 5% against the yuan on Sept. 4 on the Moscow Stock Exchange (MOEX) after the finance ministry’s plans for forex interventions implied that the central bank’s daily yuan sales would plunge in the coming month to the equivalent of $200 million. The ...

USD: ING’s customers turn a little more bearish on the dollar In a poll taken during our Economics Live webinar yesterday, 25% of respondents felt EUR/USD would end the year over 1.13, while 46% felt it would remain roughly stable in a 1.10-1.13 range. This was a subtle shift from poll results in early June which showed 47% expected EUR/USD to end the year in a 1.07-1.11 range and 30% expected 1.02-1.07. Stunningly, only 1% of respondents now expect EUR/USD to end the year sub 1.07. The shift in tone ...

The dollar slipped against most major currencies on Wednesday after July U.S. job openings data signaled a softening labor market, tilting the odds further in favor of larger interest rate cuts by the Federal Reserve. Traders boosted bets that the Fed will deliver a half-a-percentage-point reduction at its next meeting, following news that job openings in July fell to the lowest level in 3-1/2 years. Friday’s U.S. payrolls report could offer further clues on the timing and pace of Fed rate cuts. “The U.S. central bank must not keep interest ...

Markets may need to get more concerned about a US recession to price in more Fed easing at this stage. While that can benefit JPY, CHF, and to a lesser extent EUR, we may see a net-negative effect on higher beta currencies vs USD as equities may take a hit in the process. Today, the main events are US job openings and another rate cut by the Bank of Canada USD: Data tests continue Markets got back into action after the US Labor Day with a defensive stance and risk ...

The safe-haven Japanese yen rallied on Wednesday while riskier currencies like the Australian dollar and sterling languished as traders ducked for cover following the worst sell-off in almost a month on Wall Street and big losses for Asian stocks. The catalyst was ostensibly some soft U.S. manufacturing data, which fanned worries about a hard landing for the world’s biggest economy, with traders already nervous ahead of crucial monthly payrolls data on Friday. “The bears are back with a bang,” said Michael Brown, senior research strategist at Pepperstone, while adding that ...

The South African rand weakened on Tuesday after data showed the country’s second-quarter economic growth was slightly weaker than expected. At 1537 GMT, the rand traded at 17.9725 against the dollar , about 0.9% softer than its previous close. Gross domestic product expanded 0.4% in quarter-on-quarter seasonally-adjusted terms in April to June (ZAGDPN=ECI), opens new tab, below the 0.5% forecast by economists polled by Reuters, figures released by Statistics South Africa showed. While growth was supported by higher consumer spending and power availability, there were output declines in agriculture, mining ...

USD: First data test of the week Currency volatility should pick up today as US markets re-open after the long Labour Day weekend and data releases take over. The big event of the day is the ISM manufacturing index in the US. Remember this has been in contraction territory (i.e. below 50) every month since October 2022, excluding a short-lived rebound in March this year. The slack in the manufacturing sector has been priced in for a while, and we’ll probably need to see a rather soft number to trigger ...

The dollar fell more than 2% against other major currencies in August, marking its biggest monthly drop this year and providing some relief to economies that have suffered under the weight of dollar strength. The dollar’s downtrend, which has long been anticipated, is driven by expectations that the U.S. Federal Reserve will cut interest rates as the economy weakens. “The dollar has been under pressure and it will remain under pressure over the remainder of this year,” said Guy Miller, chief market strategist, Zurich Insurance Group. Here’s where the relief ...

The dollar edged down on Monday but remained within striking distance of its highest level in almost two weeks as investors’ focus moved to a U.S. jobs report due at the end of this week. U.S. payrolls, due on Friday, will be crucial after Federal Reserve chair Jerome Powell pivoted from a battle against inflation to a readiness to guard against job losses. Analysts say the job figures will determine the magnitude of the Federal Reserve’s expected rate cut. Markets have already priced in for weeks a cut of 25 ...

As investors turn to the Swiss franc as an alternative to Japan’s yen to fund carry trades, the risk of the currency staging one of its rapid rallies remains ever present. The Swiss franc has long been used in the popular strategy where traders borrow currencies with low interest rates then swap them into others to buy higher-yielding assets. Its appeal has brightened further as the yen’s has dimmed. Yen carry trades imploded in August after the currency rallied hard on weak U.S. economic data and a surprise Bank of ...

USD: Lots of US labour market data this week Having sold off around 5% since the start of July, the dollar rebounded last week. Clearly, the dollar bear trend needs to be fed and there was little on offer last week. It is a different story this week. After today’s US Labor Day public holiday, the US data calendar picks up with ISM manufacturing data (Tuesday), JOLTS job opening data Wednesday, ADP, jobless claims, and ISM services (Thursday), and then the main event of the week, the August jobs report ...

The dollar edged down on Monday but remained within striking distance of its highest level in almost two weeks, as investors’ focus moved to a U.S. jobs report due at the end of this week. U.S. payrolls, due on Friday, will be crucial after Federal Reserve chair Jerome Powell pivoted from a battle against inflation to a readiness to protect against job losses. Analysts say the job figures will determine the magnitude of the Federal Reserve’s expected rate cut. Markets have already priced in for weeks a cut of 25 ...

China will launch a new derivative instrument next week to help market participants better hedge forex risks, the operator of China’s forex market said on Friday. The launch of foreign currency non-deliverable forwards (NDF) in the interbank market on Sept. 2 will further satisfy market demand for risk-management, the China Foreign Exchange Trade System (CFETS) said in a statement. In NDF trading, the counterparties settle the transaction, not by delivering the underlying pair of currencies, but by making a net payment that reflects the difference between the agreed forward exchange ...