US dollar slumps following weak US jobs data

The US dollar weakened through yesterday’s session following the publication of the latest Job Openings and Labour Turnover survey (JOLTs).

Meanwhile, the pound is trading sideways so far this morning, with GBP/EUR flat at €1.1857, and GBP/USD stable at $1.3147. GBP/CAD is rangebound at CA$1.7759, while GBP/AUD holds steady at AU$1.9554 and GBP/NZD slips to NZ$2.1182.

Looking ahead, the US dollar could experience more volatility today following the publication of the latest ISM services PMI.

What’s been happening?

The US dollar faced significant headwinds on Wednesday following the publication of the latest Job Openings and Labour Turnover survey.

A larger-than-expected fall in new job openings in July raised fresh concerns over the overall health of the US labour market. This in turn stoked Federal Reserve interest rate cut bets and dragged on the ‘greenback’.

The pound, meanwhile, traded with modest gains yesterday, as the currency was supported by the publication of the UK’s finalised services PMI.

The services index came in higher than expected in August, rising from 52.5 to 53.7, ahead of a more modest 53.3 expectation, underpinning GBP exchange rates.

Turning to the Euro, the Eurozone’s own services index also rose in August, albeit at a slower pace than preliminary figures had suggested, limiting demand for the single currency.

What’s coming up?

Looking ahead, the US dollar may remain on a downward trajectory moving into the second half of the week as the latest ISM services PMI is forecast to dip, which could see USD exchange rates remain on the back foot.

Turning to the euro, the latest factory orders from Germany are providing some support to the single currency this morning after reporting orders growth unexpectedly remained positive in July.

The Eurozone will also publish its latest retail sales data this morning, which may also support EUR exchange rates should the reading confirm a slight uptick in consumer spending in July.

Turning to the pound, UK data will be largely absent on Thursday, which could see GBP exchange rates trade without a clear trajectory.