Greenback suffered a strong sell off against its majors ahead of August’s NFP report, while USD/CAD stole the show with its harsh decline. Euro has been subdued even though CPI surprised positively.
U.S. Dollar Plunged on Soft Data Before the NFP
The U.S. dollar plunged versus all the G10 currencies due to the weak data released. The U.S. personal income was 0.4% in July above market expectations of 0.3% versus a flat month before, however, the personal spending fell short of forecasts. It had an increase of 0.3% below market consensus for 0.4% while the personal consumption expenditures came in 1.4% in line the predictions but lower than the prior month’s figure of 1.5%. Later today the focus of the USD traders will be on the U.S. employment report. The NFP number forecast shows that U.S. economy added fewer jobs in August, 180K versus 209K in July. The average hourly earnings are expected to remain unchanged at 0.3% mom as before as well as the unemployment rate for the same month is expected to remain at 4.3%. Significant attention will be paid to the Markit and ISM manufacturing PMIs. The ISM is estimated to show that the manufacturing index ticked lower to 56.2 versus 56.3 the previous reading. Michigan consumer sentiment index for August is also coming out, and is forecasted to show lower sentiment among the consumers, at 94.2 from 94.6 the prior release.
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