Forex Today: Major US data releases will boost USD valuation

Here’s what you need to know on Thursday, September 5:

He United States Dollar (USD) The US economy is struggling to stage a rebound after weakening against its main rivals on Wednesday. On the US economic docket, the ADP employment change report for August, the initial weekly jobless claims and the ISM services PMI data for August will be released later in the day. Before these releases, Eurostat will publish retail sales data for July.

On Wednesday, data released by the US Bureau of Labor Statistics showed that job openings stood at 7.67 million on the last business day of July. This reading was below the market expectation of 8.1 million and caused the USD to come under selling pressure. After touching a fresh two-week high at 101.91 on Tuesday, the USD Index turned south and lost 0.5% on Wednesday. In the European morning, the index is holding steady above 101.00. Meanwhile, the US 10-year Treasury bond yield fell below 3.8% and major Wall Street indexes closed the day mixed. In early trading on Thursday, US stock index futures are trading marginally lower.

US Dollar PRICE This week

The table below shows the percentage change of the US Dollar (USD) against the major currencies this week. The US Dollar was the strongest currency against the New Zealand Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD -0.33% -0.12% -1.82% 0.20% 0.74% 0.75% -0.30%
EUR 0.33% 0.23% -1.51% 0.51% 1.08% 1.07% 0.02%
GBP 0.12% -0.23% -1.74% 0.27% 0.82% 0.87% -0.23%
JPY 1.82% 1.51% 1.74% 2.00% 2.64% 2.75% 1.48%
CAD -0.20% -0.51% -0.27% -2.00% 0.59% 0.55% -0.49%
AUD -0.74% -1.08% -0.82% -2.64% -0.59% -0.02% -1.01%
NZD -0.75% -1.07% -0.87% -2.75% -0.55% 0.02% -1.04%
CHF 0.30% -0.02% 0.23% -1.48% 0.49% 1.01% 1.04%

The heatmap shows percentage changes of 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 chart will represent the USD (base)/JPY (quote).

Speaking at an event hosted by the Anika Foundation earlier in the day, Reserve Bank of Australia (RBA) Governor Michele Bullock said they need to see inflation slowing in real numbers before acting on interest rates. AUD/USD showed no reaction to these comments and was last seen moving sideways above 0.6700.

Data from Germany showed on Thursday that factory orders rose 2.9% on a monthly basis in July. This reading was much better than the market expectation of a 1.5% contraction. After Wednesday’s rebound, EUR/USD remains firm in the European morning and is trading slightly below 1.1100.

Bank of Japan (BoJ) board member Hajime Takata noted on Thursday that Japan’s current real interest rate is below the estimated natural interest rate, adding that this means monetary conditions remain accommodative. USD/JPY The pair posted heavy losses for the second day in a row on Wednesday, losing more than 2% in that time frame. The pair remains under modest bearish pressure and is trading at its lowest level since early August around 143.50.

GBP/USD benefited from the selling pressure surrounding the USD and closed in positive territory on Wednesday. The pair remains stable near 1.3150 on Thursday.

Gold The pair posted small gains on Wednesday and continued to rise during Asian trading hours on Thursday. XAU/USD was last seen trading above $2,500.

Employment FAQs


Labour market conditions are a key element in assessing the health of an economy and therefore a key factor in currency valuation. A high level of employment, or a low level of unemployment, has positive implications for consumer spending and therefore economic growth, which boosts the value of the local currency. On the other hand, a very tight labour market – a situation where there is a shortage of workers to fill vacant positions – can also have implications for inflation levels and therefore for monetary policy, as a low labour supply and high demand leads to higher wages.


The pace at which wages grow in an economy is key for policymakers. High wage growth means that households have more money to spend, which often translates into higher prices for consumer goods. Unlike other, more volatile sources of inflation, such as energy prices, wage growth is seen as a key component of underlying and persistent inflation, as wage increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding their monetary policy.


The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks have mandates explicitly related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank (ECB) has only one mandate: to keep inflation under control. Still, and regardless of their mandates, labor market conditions are an important factor for policymakers given their importance as an indicator of the health of the economy and their direct relationship with inflation.

Source: Fx Street

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