The US dollar index lost around 0.5 percent in yesterday’s session following a big miss on ISM manufacturing, which came in at 54.1 versus 57.5. The ISM and Apple’s revenue guidance weighed on the US dollar. At this moment, the market is pricing slight Fed rate cuts for this year, something that we have not seen in a while. Little attention was paid to the stronger than expected ADP print yesterday, which came in at 271k versus the forecast of 180k, as employment is seen as a lagging indicator.
However, the US dollar started increasing 0.15 percent this morning when worries over China-U.S. trade tensions appeared to ease on confirmation that the vice ministers from the two countries are preparing to hold talks starting on Monday. The Asian nation’s cut to the amount of cash banks have to keep in reserve further boosted sentiment.
The US dollar is getting further help from economic data this morning. The non-farm employment change came in at 312k versus the forecast of 179k, a robust number; however, the unemployment rate came in at 3.9 percent, slightly higher than the read of 3.7 percent.