USD gains continued into the month's end with both GBPUSD and EURUSD hitting a one-week low. US core CPE numbers came in broadly in-line with expectations, as did EU CPI numbers earlier in the day, solidifying the likelihood of a 0.25% rate cut by the ECB in September.
*Daily move - against G10 rates at 7:30am, 02.09.24
** Indicative rates - interbank rates at 7:30am, 02.09.24
After last month's disappointing numbers stoked fears of a possible US recession, this week, the main focus is on US job numbers. JOLTS job openings and ADP payroll numbers will be out during the week culminating with the nonfarm payroll print on Friday. Markets are expecting 160,000 jobs to be added in August with the unemployment rate easing to 4.2%.
As mentioned last week, September has historically been a challenging month for equities and overall risk appetites. This risk-averse sentiment has traditionally favoured USD leading to its most robust performance for the year. This week's job numbers could significantly influence market trends for the remainder of the month.
Today the US celebrates Labor Day, and in the absence of volatility catalysts, it will likely be a quiet start to the week.
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