The US Dollar experienced a decline, with the dollar index falling to approximately 98.1. This drop reversed gains from the prior session as market participants anticipated the August jobs report. Weaker than expected economic data, particularly concerning private payrolls and job openings, increased speculation about a Federal Reserve rate cut. This anticipation of monetary easing contributed to the dollar’s broad depreciation against other major currencies.
- The dollar index fell to around 98.1.
- The ADP survey showed private payrolls increased by only 54,000 in August.
- Job openings dropped to 7.18 million in July, the lowest since September 2024.
- Jobless claims climbed to a two-month high.
- Traders are pricing in nearly 100% odds of a 25 basis point rate cut on September 17.
- The dollar slipped broadly, declining most against the New Zealand and Australian dollars.
The currency’s value is currently being suppressed by expectations of lower interest rates. The perceived weakness in the labor market, reflected in reduced hiring and increased unemployment claims, is a primary driver behind these expectations. Consequently, the dollar faces downward pressure as investors anticipate less favorable returns on dollar-denominated assets.