US Dollar Recovers Slightly Amid Economic Uncertainty
The US dollar started the day with some gains in relation to other major currencies, halting yesterday’s sharp losses. On Tuesday, the greenback dropped half a percentage in relation to other major currencies following the release of unexpectedly weak labour data. The US JOLTS report on job openings for July dropped to the lowest level in over two years, triggering fears that the American economy may be about to slam hard on the brakes as the impact of the Federal Reserve’s draconian monetary tightening reaches a high watermark. Until last week, the markets were firmly betting on another Fed rate hike before the end of the year; however, the JOLTS numbers created uncertainty. Jerome Powell said last week that the central bank’s policymaking will ultimately be data-dependent, and yesterday's figures will make another rate hike less likely. Against this background, this Friday’s non-farm payrolls become even more relevant than they normally are, as the July new jobs data may become the tie-breaker in this tightly balanced decision-making process.
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