The US Dollar Index (DXY) faced pressure as speculation of a potential 50 bps rate cut by the Federal Reserve looms, following signs of a cooling US labor market. Key data releases later in the week will be crucial for market direction.
Key Points for Thursday, September 5:
- The DXY dropped to multi-day lows near 101.20 amid talks of a larger rate cut and falling US yields.
- Important data releases include ADP Employment Change, Initial Jobless Claims, S&P Global Services PMI, and ISM Services PMI.
- EUR/USD strengthened towards 1.1100 on Dollar weakness, with upcoming data releases from Germany and the eurozone.
- GBP/USD rose above 1.3100 on positive market sentiment, with upcoming data on New Car Sales and S&P Global Construction PMI.
- USD/JPY tested 144.00 on Yen strength and lower Dollar, with Average Cash Earnings and Foreign Bond Investment data awaited.
- AUD/USD remained steady above 0.6700 amid Chinese concerns and commodity price declines, with upcoming Balance of Trade and RBA speech.
- WTI prices hit new YTD lows near $69.00 per barrel on bearish sentiment.
- Gold prices hovered below $2,500 per ounce despite Dollar weakness, while Silver rose past $28.00 per ounce.
Overall, the US Dollar’s weakness against major currencies reflects growing expectations of a Fed rate cut. Investors are closely watching upcoming data releases for further insight into the health of the US economy. Market sentiment remains cautious amidst global economic uncertainties, impacting commodity prices and currency movements.