- The US Dollar loses momentum as Eurozone manufacturing data beats expectations.
- The Greenback had pared some losses following strong job openings on Tuesday.
- US ADP figures are expected to confirm a tight labour market.
The US Dollar Index (DXY) nudges lower on Wednesday, following a sharp rebound on Tuesday. The Greenback has lost momentum as it approaches the 100.00 psychological area, as the impulse from the US JOLTS Job Openings positive surprise waned.
Investors are growing increasingly cautious about the US Dollar, awaiting the release of the US ADP Employment reading and May’s ISM Services PMI figures. Beyond that, Trump’s lack of advances deals with trading partners, the day when they are supposed to submit their proposals, is keeping traders on edge.
Apart from that, Eurozone Services PMI has been revised up to a 49.7 reading in May, from the previously estimated 48.8, which has given a moderate boost to the Euro, increasing negative pressure on the US Dollar.
US ADP is expected to confirm a healthy labour market
On Tuesday, US JOTS data boosted market sentiment after April’s Job Openings posted an unexpected advance to 7.39 million. Market experts had forecasted a slight decline to 7.1 million following an upwardly revised 7.2 million in March.
The positive JOLTS reading offset the impact of the 3.7% decline in Factory Orders, which exceeds the 3% decline expected by the market. These figures come after a larger-than-expected contraction in Manufacturing activity and highlight the negative impact of tariffs on factory activity.
Later today, the US ADP Employment report is expected to show that private payrolls increased by 115K in May, following a 62K increase in April. Somewhat later, the US ISM Services PMI is expected to reflect a moderate expansion of business activity.
