USD demand picked up marginally yesterday afternoon following a better-than-expected ISM services number for August, lifted by new orders rising to the highest since last August. Markets largely ignored the disappointing ADP payroll number and jobless claims.
*Daily move - against G10 rates at 7:00 am, 05.09.25
** Indicative rates - interbank rates at 7:00 am, 05.09.25
UK retail sales rose 0.6% in July versus an expectation of 0.3%. However, there were downward revisions in previous numbers showing that household spending was at a slower pace than initially thought. GBP moves have been muted as a result. All eyes on the job numbers at 1.30pm today. Given how much the markets are already pricing in a 25bp cut in September, it would really need a big disappointment in the numbers to see markets price in the potential for a 50bp cut this month which would result in a weaker USD. A surprise to the upside on job numbers would bring about strength in USD.
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