020 7898 0500The US dollar began weakly, experiencing losses against most of its major partners. This was due to pessimism triggered by US Federal Reserve Chair Janet Yellen, who said that the economy will still need support for some time. Dollar weakness was also compounded by a worse-than-expected purchasing managers’ index (PMI) figure from Chicago. With the ISM purchasing managers’ index (PMI) from the manufacturing industry reporting below the forecast level on Tuesday, the dollar fell against most currencies. However, poor PMI data from the UK resulted in the dollar strengthening against sterling. Wednesday was a positive day for the dollar, thanks to some better than expected labour data. As the independent non-farm employment change from the ADP showed the biggest increase this year, the dollar again gained ground against most currencies, as the positive data fuelled optimism over an interest rate rise. Yesterday then saw more gains for the US currency, despite data from the country being less impressive. The trade balance, unemployment claims, and non-manufacturing PMI all came in behind expectations, but continued positive sentiment drove the dollar onwards.
Today, the ever-crucial official non-farm employment change figure will be released alongside the unemployment rate, with investors keen for more data supporting the potential decision in favour of interest rate hikes.
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