US Dollar’s upward momentum fades following dismal job opening numbers.
US Dollar Index (DXY) is trading slightly lower during Wednesday’s European session. Softer-than-expected JOLTS Job Openings pushed US Treasury yields lower on Tuesday, putting more downward pressure on the US Dollar (USD).
Job openings fell to their lowest level in more than three years in September. These data cast considerable doubt on the health of the labor market ahead of Friday’s Nonfarm Payrolls (NFP) report, and the Federal Reserve’s (Fed) monetary policy Decision is only one week away.
On Wednesday, the third quarter US Gross Domestic Product (GDP) is likely to show that the world’s largest economy increased steadily in the third quarter, unlike the rest of the world’s major economies.
However, the ADP Employment Report might steal the show. The market consensus predicts a big drop in job creation, which might raise concerns about the labor situation and precipitate a further US Dollar slump.
Daily Market movers: The US Dollar shows symptoms of weakness ahead of important US releases.
US JOLTS Job Openings decreased to 7.44 million in September, while August’s figure was lowered to 7.86 million from 8.04 million previously.
The futures markets are now completely pricing in a quarter-point interest rate. The Fed expected to decrease rates during its meeting next week, according to statistics from the CME Group’s FedWatch program. The likelihood of another 25 basis point cut in December have risen to 76.6% from 72% at the start of the week.
Later on Wednesday, the US Gross Domestic Product (GDP) is likely to indicate that the economy expanded at a 3% annualized rate in the third quarter, matching the pace of the previous quarter.
The ADP Employment Report, however, anticipated to add to the evidence of a loosening labor market, with a 115K increase in October, down from 143K in September.
On Thursday, the Personal Consumption Expenditures (PCE) Prices Index, the Fed’s preferred inflation report, expected to show that price pressures continue to decline. The core reading fell to 2.6% annually from 2.7% in September.
The highlight of the week will be Friday’s NFP report, which expected to reveal a big decrease in new payrolls. Such a result could harm speculative demand for the US dollar.
