Dollar Pressured by Jumbo Fed Rate Cut Bets
The dollar index traded around 101.3 on Thursday after losing half a percent in the previous session, weighed down by growing expectations that the Federal Reserve will deliver a supersized 50 basis point rate cut later this month due to weak data. Markets are also pricing in about 125 bps in total easing this year, up from 100 bps last week.
The JOLTS report showed that job openings unexpectedly fell to an over three-year low in July, further fueling market concerns about a softening labor market. This added to the sharper-than-expected downturn in domestic manufacturing activity highlighted by the ISM PMI which triggered renewed fears of a recession. Markets now look ahead to the latest weekly jobless claims data on Thursday and the monthly jobs report on Friday to gain more clarity on the labor market. The dollar nursed losses against other major currencies, weakening the most versus the yen.
Source: Trading Economics