U.S. Dollar Lower As Soft ADP Data Increases Odds Of Aggressive Rate Cut
05 September 2024 - 9:23PM
RTTF2
The U.S. dollar fell against its most major counterparts in the
New York session on Thursday, as private sector employment
increased less than expected in August, increasing the chances of a
50 basis point rate cut by the Federal Reserve this month.
Data from payroll processor ADP showed that private sector
employment rose by 99,000 jobs in August after climbing by a
downwardly revised 111,000 jobs in July.
Economists had expected private sector employment to jump by
145,000 jobs compared to the addition of 122,000 jobs originally
reported for the previous month.
The data is likely to add to recent concerns about the economic
outlook but could also boost the chances of accelerated interest
rate cuts by the Federal Reserve.
Meanwhile, the Labor Department released a separate report
showing a modest decrease by first-time claims for U.S.
unemployment benefits in the week ended August 31st.
The report said initial jobless claims dipped to 227,000, a
decrease of 5,000 from the previous week's revised level of
232,000.
Economists had expected jobless claims to edge down to 230,000
from the 231,000 originally reported for the previous week.
The greenback declined to a 1-week low of 1.1119 against the
euro and a 6-day low of 1.3179 against the pound, off its early
highs of 1.1074 and 1.3136, respectively. The currency is likely to
challenge support around 1.12 against the euro and 1.33 against the
pound.
The greenback dropped to more than a 4-week low of 142.84
against the yen and a 2-day low of 0.6225 against the kiwi, from
its early highs of 143.90 and 0.6178, respectively. The currency is
seen finding support around 141.00 against the yen and 0.63 against
the kiwi.
The greenback was lower against the loonie and the aussie and
was trading at 1.3510 and 0.6730, respectively. Immediate support
for the currency is seen around 1.32 against the loonie and 0.69
against the aussie.
Meanwhile, the greenback recovered to 0.8485 against the franc,
from an early 1-week low of 0.8433. It is poised to challenge
resistance around the 0.92 level.
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