WASHINGTON (dpa-AFX) - The U.S. Dollar value ticked lower after the private-sector employment data turned out to be weaker than estimates, lowering the expectations of a rate hike by the U.S. Federal Reserve. Concerns of a broad-based war in the gulf following the recent U.S.-Iran flare-up and the consequent inflation concerns limited the decline.
Today, the U.S. Dollar Index DXY, which measures the Greenback against a basket of other major currencies, was last seen trading at 99.55, down by 0.12 (or 0.12%).
While against the Euro, the USD was trading at 1.159, up by 0.04%, against the GBP, the USD was trading at 1.349, up by 0.20%.
Against the USD, the Japanese Yen was trading at 158.703, up by 0.91%, and the Swiss Franc was trading at 0.813, down by 0.16%.
Against the USD, the Canadian Dollar was trading at 1.384, up by 0.36%. Today, referring to the risks of higher inflation due to the Canada-U.S. trade war as well as the Middle East conflict, the Bank of Canada held its benchmark interest rate steady at 2.25%.
Against one unit of Australian Dollar, the USD was trading at 0.717, down by 0.37%.
In the U.S. today, the Mortgage Bankers Association of America revealed that the Purchase Index in the U.S. increased to 157.80 on August 28 from 154.40 of the previous week.
The American Data Processing's National Employment Report revealed that the private sector added 38,000 jobs in August, the lowest since January, following an upwardly revised 46,000 in July and below forecasts of 47,000.
Strong gains were seen in education and health services, leisure and hospitality, and construction. However, losses were sharp in manufacturing and professional and business services.
Though the labor market is overall holding steady, the pace of hiring in companies has slowed with firms being more selective in who they add to their payrolls.
While large companies added 34,000 jobs, those with fewer than 50 employees added 3,000.
Last week, U.S. Federal Reserve Chairman Kevin Warsh described the labor market as balanced but the numbers now reveal a slowdown.
An ADP reading below the forecast is generally considered to be bearish for the U.S. dollar.
Expectations for a rate hike in the upcoming September 15-16 meeting of the U.S. Federal Reserve, lowered from nearly 68.20% yesterday to 60.20% today, according to the CME Group's FedWatch Tool.
Investors are awaiting the nonfarm payrolls data to be released on September 4 to gather insights on the health of labor market as well as a sense of how the economy is moving.
If the official data too shows sluggish growth, the Fed's decision-making would become complicated.
Meanwhile, in the ongoing Middle East crisis, today, Trump announced through Truth Social that the U.S. is in a commanding position to even care about forcing Iran for a bargain and reiterated that the U.S. is in total control of the Strait of Hormuz.
Through a separate post, Trump hinted at changing the name of Hormuz Strait to Trump Strait.
Experts are of the view that the U.S. is unwilling to return for negotiations.
Yesterday, U.S. President Donald Trump announced that U.S. forces began a barrage of strikes on Iran on several targets, seeking to remove Iranian threat both to the commercial shipping in the Strait of Hormuz as well as to the American service members.
Iran retaliated by targeting the U.S. bases in Bahrain, Iraq, Jordan, Kuwait, and the United Arab Emirates.
The U.S. dollar hovered near a two-week high as investors resorted to safety in the backdrop of possible energy shocks across major economies.
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