USD dips following JOLTS data release
Daily Currency Update
The US dollar dipped this morning following the release of the job openings and labor turnover survey (JOLTS) this morning. JOLTS data showed job vacancies posted by US employers in July came in lower at 7.673 million versus the estimates of 8.1 million and June's reading of 7.91 million, downwardly revised from 8.184 million. Weak job posting data escalated downside risks to the US job market. The US Dollar Index (DXY), which tracks the greenback's value against six major currencies, tumbled below 101.40. This dip followed the USD correction yesterday after the release of the Institute for Supply Management’s (ISM) Manufacturing Purchasing Manager’s Index (PMI) for August, which prompted expectations that the Federal Reserve could begin the policy-easing process aggressively, which is expected this month. The ISM agency reported that activities in the manufacturing sector contracted at a faster-than-projected pace, with PMI landing at 47.2 from the estimates of 47.5.Key Movers
The EUR/USD pair bounced back strongly from a two-week low of 1.1025. The major currency pair strengthened as the US dollar fell after the release of the US JOLTS Job Openings report.The GBP jumped to near 1.3160 against the USD so far today after falling to near 1.31. The pound gained strength against the USD following the release of the US JOLTS data which pulled the USD down against most major pairs.
The JPY continued to strengthen against the greenback following the release of the Jibun Bank Services PMI data today. The index, which is an economic indicator that measures the health of the banking services sector of the economy, was revised to 53.7 in August from an initial estimate of 54.0. Although this marked the seventh consecutive month of expansion in the service sector, the latest figure remains unchanged from July.
The Bank of Canada (BoC) reduced its key policy rate by 25 basis points to 4.25% this morning, which was in line with expectations, while signaling concerns that weaker-than-anticipated growth could lead to a sharper drop in inflation. Governor Tiff Macklem noted in his opening remarks that, with inflation nearing the target, the central bank must be increasingly cautious about the risk of an overly weak economy causing inflation to decline excessively.
Expected Ranges
- EUR/USD: 1.10362 - 1.10869 ▲
- GBP/USD: 1.31008 - 1.31690 ▲
- AUD/USD: 0.90626 - 0.91236 ▲
- USD/CAD: 1.35072 - 1.35656 ▼