Dollar employment declines: He Dollar The US dollar fell against most major currencies on Wednesday, following data showing a decline in US job openings in July. This drop signals a possible weakening of the labor market, raising expectations for more significant interest rate cuts by the Federal Reserve. Market participants increasingly anticipate a 0.50 percent rate cut by the Fed at its next meeting, driven by news that job openings in July fell to their lowest level in three and a half years. The upcoming US payrolls report on Friday could provide more insight into the timing and extent of potential Fed rate cuts. Atlanta Federal Reserve President Raphael Bostic stressed the need for the central bank to avoid keeping interest rates high for too long, to prevent negative impacts on employment. The dollar index, which tracks the US currency against six major pairs, fell 0.3 percent to 101.4. The dollar also fell 1 percent to 144.07 yen, marking a one-week low, as global financial markets tilted toward safer assets. U.S. stocks continued to struggle after a sharp drop on Tuesday, triggered by concerns about the U.S. economy and technology sector valuations.
Manufacturing sector weakens outlook
Weaker US manufacturing data released on Tuesday have raised fears of a possible economic recession. After a significant 2 percent drop against a basket of currencies in August, the Dollar The yen has stabilized as increased market volatility has boosted demand for safer currencies. Marc Chandler, chief market strategist at Bannockburn Global Forex, noted that “stock market instability and falling US yields have strengthened the yen.” The dollar index remains about 1 percent above its late-August low of 100.51. Brad Bechtel, global head of FX at Jefferies, suggested that “the dollar has recovered but is hesitant to move higher until more information is available. After Friday’s report, the DXY could be at 100 or below or 104 or above.” Economists expect Friday’s report to show an increase of 165,000 US jobs in August, following an increase of 114,000 in July.
Unemployment benefit applications under review
Investors are also keeping an eye on jobless claims data due on Thursday. The euro rose 0.2% to $1.107075, recovering from early losses. While eurozone business activity received a temporary boost following the recent Olympic Games in France, demand is expected to be weaker again following the conclusion of the Paralympics. Dollar The British pound appreciated 0.3 percent against the US dollar after the Bank of Canada cut its key policy rate by 25 basis points to 4.25 percent but expressed concerns that weaker-than-expected growth could lead to inflation falling too quickly. The British pound rose 0.2 percent to $1.3138, recovering from an overnight low of $1.3101. In the cryptocurrency market, Bitcoin fell about 1 percent to $57,751, and ether declined about 0.8 percent to $2,444 as investors shunned riskier assets.(With contributions from Reuters)
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