USD holds steady amid mixed data
Daily Currency Update
The USD held mostly steady this morning amid mixed data releases. The ADP Employment Report, an independent measure of the labor market, showed private sector employment increased by 99,000 jobs in August versus the anticipated 145,000 and annual pay was up 4.8% year-over-year. This demonstrated the labor market continuing to cool in August as job creation slowed for the fifth straight month while wage growth remained stable. Conversely, the Institute for Supply Management’s Services Purchasing Manager’s Index (PMI), which measures the activity level of industries that produce less tangible products, such as hospitality, health care, and financial services, expanded for the second month in a row at 51.5%. This helped to bolster the USD and hold steady against other major currencies.Key Movers
The EUR/USD pair extended Wednesday’s recovery above the 1.11 level this morning before dropping back to the 1.108 level following the mixed data releases from the US.The GBP/USD pair gained ground this morning trading near the 1.3166 level, up about 0.17%. This gain comes after the USD weakened against most of its rivals following the release of weak ADP employment data. As the USD was bolstered with positive PMI data, the pair looked to flatten out.
The Canadian dollar remained steady while markets reflected on the recent rate cuts by the Bank of Canada (BoC). The rate cut was not surprising and while the policy spread between the BoC and the Federal Reserve sat at 125 basis points (bps), continue to expect the Fed to catch up with the BoC’s easing process quickly in the coming months. Meanwhile, the end of the New Democratic Party’s (NDP) “supply and confidence” support agreement with Justin Trudeau and the minority Liberal government, did not disrupt the steady Loonie.
Expected Ranges
- EUR/USD: 1.1078 - 1.1122 ▲
- GBP/USD: 1.3140 - 1.3180 ▲
- AUD/USD: 0.6715 - 0.6743 ▲
- USD/CAD: 1.3499 - 1.3524 ▼