The two-day decline in the US Dollar Index has been followed by a minor recovery.
The US Dollar (USD), which had suffered significant losses versus its key competitors on Monday and Tuesday. Appears to have regained its footing by mid-week as seen by the US Dollar Index remaining above 101.50.
Data from the US ISM Services PMI and ADP Employment will be keenly scrutinized.
On Wednesday, market players will closely monitor the Automatic Data Processing (ADP) data on private sector employment. As well as the March Services PMI survey from the ISM. Following these data releases. The market’s assessment of the US Federal Reserve’s (Fed) rate outlook may have an impact on the USD’s value. The CME Group Fed Watch Tool indicates that the likelihood of a 25 basis points (bps) rate increase has reduced to around 40% from 60% earlier in the week. In response to Tuesday’s poor US employment openings number. The US Bureau of Labor Statistics said on Tuesday that there were 9.9 million fewer job opportunities. On the final business day of February than there were on the same day in January (10.5 million).
In March, it is anticipated that private sector employment in the US would increase by 200,000.Headline for the ISM The services PMI is predicted to drop slightly from 55.1 in February to 54.5. The Prices Paid Index is predicted to slightly decrease to 65.2 from 65.6. While the Employment component is expected to remain above 50.
In a statement prior to the release of this data “all the economic numbers have the potential to influence market expectations on the Fed’s monetary policy. Which are steady regarding the very short-term but fluctuate sharply considering what could happen from the third quarter onward.” The US Census Bureau said earlier this week that February’s factory orders fell by 0.7% on a monthly basis, less than the market’s forecast for a 0.5% drop.
According to Bloomberg, the Russian market now trades more Chinese Yuan than US Dollar.
Chinese Yuan trading volume in Russia eclipsed that of the US Dollar for the first time in February. According to a report from Bloomberg on Tuesday. The site claims that the difference has widened even more in March.
Brazil and China agreed last week to avoid using the US dollar as a middleman in trade negotiations. Some OPEC+ producers have agreed to voluntarily reduce their output from May through the end of the year. According to Saudi Arabia’s announcement on Sunday. The group’s overall productivity will be lessened even further. The West Texas Intermediate (WTI) barrel had a significant bullish gap at the beginning of the week and climbed above $82 for the first time since late January. During a period of consolidation, WTI maintains a comfortable price above $80.
The unexpected reduction in OPEC supply, according to Federal Reserve Bank of St. Louis President James Bullard, may make it harder for the Fed to get inflation back to its goal level of 2%.
ISM’s Report on Business was released on Monday, and it showed that the manufacturing sector’s economic activity contracted at an accelerated rate in March, falling from 47.7 in February to 46.3 in March.
The PMI survey’s Prices Paid Index, which measures inflation, fell from 51.3 to 49.2.
