US Dollar tries to hold above 101 in the DXY after ADP misses mark

NEW YORK (September 5) The US Dollar (USD) trades softer on Thursday, with a lot of data points set to be released in a condensed time span. The Greenback already eased on the back of the JOLTS Job Openings report on Wednesday, when the previous number was revised and the recent print for July came in below the estimation. It was enough for markets to price in more rate cuts by the Federal Reserve (Fed) and devalue the US Dollar on the back of narrowing the interest rate gap between the US and other countries. 

On the economic data front, it will be up to experienced traders to navigate the set of data that will be released on Thursday to markets. The monthly ADP Employment Change for the private payrolls release already came in softer than expected, while the previous number got revised down as well. Next up the weekly Initial/Continuing Jobless Claims, which will move the US Dollar. The Purchasing Managers Index (PMI) Services data from the Institute for Supply Management (ISM) is also of note. 

Daily digest market movers: ADP weighs with JOLTS on US Dollar

• At 11:30 GMT, the Challenger Job Cuts for August jumped up 193% from 25,885 to 75,891.
• At 12:15 GMT, the ADP Employment Change for August contracted from 122,000 to only 99,000. That is below the estimated elevated number at 145,000. To make matters even worse, the July number got revised lower from 122,000 to 111,000.
• At 12:30 GMT, the weekly Jobless Claims data came in:
  • Initial Claims came in at 227,000, coming from 232,000 previously. 
  • Continuing Claims falls from 1.860 million to 1.838 million for this week. 
  • In the slipstream of the weekly Jobless Claims, the monthly Nonfarm Productivity and Unit Labor Costs for the second quarter were released. For the Nonfarm Productivity, a small uptick from 2.3% to 2.5%. The Labor Cost fell from 0.9% to 0.4%.
• At 13:45 GMT, S&P Global will deliver its final reading for the Services and Composite PMI numbers for August. Services are expected to remain stable at 55.2, and the composite is expected to remain at the previous reading of 54.1. 
• The Institute for Supply Management (ISM) will close this Thursday's data batch at 14:00 GMT with its August reading for the Services sector:
  • The PMI headline number is expected to come in at 51.1, downfrom 51.4 in July.
  • The Employment Index was at 51.1 the previous month, with no forecast available.
  • The New Orders Index was at 52.4 in July, with no forecast available.
  • The Prices Paid Index was at 57, with no estimation pencilled in. 
• Equities are still in the red, failing to pop back in the green after the ADP miss. 
• The CME Fedwatch Tool shows a 55.0% chance of a 25 basis points (bps) interest rate cut by the Fed in September against a 45.0% chance for a 50 bps cut.  Another 25 bps cut (if September is a 25 bps cut) is expected in November by 30.2%, while there is a 49.5% chance that rates will be 75 bps (25 bps + 50 bps) below the current levels and a 20.3% probability of rates being 100 (25 bps + 75 bps) basis points lower. 
• The US 10-year benchmark rate trades at 3.73%, the lowest level this week and retreats further, narrowing the rate gap with other currencies.

FXStreet