- DXY struggles to capitalize on a two-day recovery move from the yearly low.
- Reduced bets on a 50bp Fed rate cut and geopolitical risks lend support to the USD.
- The US ADP report could provide some impetus ahead of Friday’s US NFP report.
The US Dollar Index (DXY), which tracks the value of the Dollar against a basket of currencies, consolidates its gains recorded in the last two days and fluctuates in a range, just above the 101.00 level, during the early European session on Wednesday. The Index, for now, appears to have halted this week’s good recovery move from the vicinity of its lowest level since July 2023, although the fundamental backdrop warrants some caution for bears.
Federal Reserve (Fed) Chair Jerome Powell earlier this week struck a more hawkish tone, saying he sees two more 25 basis point interest rate cuts this year as a baseline if the economy performs as expected. . Additionally, the Job Openings and Labor Turnover Survey (JOLTS) released by the US Bureau of Labor Statistics (BLS) showed that the number of job openings unexpectedly increased after two consecutive monthly declines, to 8.04 million in August. The data pointed to a still resilient US labor market and forced investors to further reduce their expectations for more aggressive policy easing from the Fed.
This, along with further escalation of geopolitical tensions in the Middle East, turns out to be another factor acting as a tailwind for the safe-haven USD. Iran launched more than 200 ballistic missiles at Israel on Tuesday in retaliation for the latter’s campaign against its Hezbollah allies in Lebanon. Additionally, Israeli Prime Minister Benjamin Netanyahu vowed that Iran would pay for its missile attack, while Iran said any retaliation would be met with vast destruction, raising the risk of a broader conflict in the region. This, in turn, moderates investor appetite for riskier assets and directs flows toward traditional safe haven assets.
Meanwhile, markets are still pricing in a more than 35% chance that the Fed will reduce borrowing costs by another 50 basis points in November, which is seen as a headwind for the DXY and warrants caution for bulls. Market participants now await the release of the US ADP report on private sector employment for fresh impetus later during the early North American session. However, the focus will be on the US monthly employment data, popularly known as the Non-Farm Payrolls (NFP) report on Friday, which will play a key role in determining the next directional move of the USD.
US Dollar PRICE Today
The table below shows the percentage change of the US Dollar (USD) against major currencies today. US dollar was the strongest currency against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | -0.09% | 0.45% | -0.05% | -0.22% | -0.14% | -0.10% | |
| EUR | 0.09% | 0.01% | 0.56% | 0.03% | -0.13% | -0.05% | -0.01% | |
| GBP | 0.09% | -0.01% | 0.52% | 0.00% | -0.14% | -0.06% | -0.02% | |
| JPY | -0.45% | -0.56% | -0.52% | -0.42% | -0.66% | -0.61% | -0.55% | |
| CAD | 0.05% | -0.03% | -0.01% | 0.42% | -0.18% | -0.10% | -0.05% | |
| AUD | 0.22% | 0.13% | 0.14% | 0.66% | 0.18% | 0.08% | 0.13% | |
| NZD | 0.14% | 0.05% | 0.06% | 0.61% | 0.10% | -0.08% | 0.05% | |
| CHF | 0.10% | 0.00% | 0.02% | 0.55% | 0.05% | -0.13% | -0.05% |
The heat map shows percentage changes for major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change shown in the box will represent USD (base)/JPY (quote).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
