DXY falls amid disappointing data releases
Daily Currency Update
The US Dollar Index (DXY) fell by around 0.17% in the past 24 hours to the 105.491 level following the release of ADP Employment and Purchasing Manager’s Index (PMI) data. The US ADP Employment report, which measures the current month's total private employment change as well as weekly job data from the previous month, showed labor growth in the private sector surprisingly slowed in June. According to the report, private employers hired 150,000 jobseekers, which missed the expectation of 160,000 and the prior release of 157,000. Similarly, the ISM Services PMI report, which measures the performance of non-manufacturing companies, showed activity in the service sector contracted significantly. Services PMI declined to 48.8 from expectations of 52.5 and the prior release of 52.8. Any figure below the 50.0 threshold depicts a contraction in an industry.Key Movers
In the Eurozone, the EUR/USD pair advanced throughout the first half of the day, as demand for the USD fell following comments from Federal Reserve (Fed) Chairman Jerome Powell mid-Tuesday. Speaking at the European Central Bank (ECB) Forum on monetary policy in Sintra, Powell said that the disinflationary trend is giving signs of resuming, although he stated they need to be more confident before reducing the policy rate.The GBP extended its strength in today’s London session after a sharp recovery from the three-day low of 1.2615 yesterday. The GBP/USD pair exhibited strength so far today as the near-term outlook of the USD became uncertain.
The Japanese Yen (JPY) lost ground against the USD this morning. The USD/JPY pair reached a new high of 161.91, a level not seen since 1986. This upside could be attributed to data indicating that Japan's business activity turned contractionary in June.
The USD/CAD pair’s forecast leaned slightly bearish as the Loonie strengthened on a rally in oil prices. West Texas Intermediate (WTI) crude oil has been trending upwards by around 1.15% in the past 5 days to site near the 82.90 mark today. At the same time, the CAD gained support from a weaker USD after Powell’s comments on interest rate reductions.
Expected Ranges
- EUR/USD: 1.07364 - 1.08169 ▲
- GBP/USD: 1.2678 - 1.2777 ▲
- AUD/USD: 0.66650 - 0.67337 ▲
- USD/CAD: 1.36175 - 1.36867 ▼