Ella 
The market sentiment was anxious before the release of economic data on Thursday, and the U.S. dollar index lacked downward momentum, but the U.S. dollar index remained under pressure at its lowest level in two weeks. Therefore, the U.S. dollar index against six major currencies once hit the key support level of the 200-day moving average near 103.00 in early trading in Asia. As of press time, it was close to 103.15.
After weak U.S. consumer confidence and economic activity data, as well as housing market data, the previous day’s signals of declining U.S. economic growth and employment once again hit the Fed’s hawkish side.
This time, early signals from Friday’s non-farm payrolls (NFP) data turned the dollar index bearish as the ADP payroll change fell to 177,000 versus consensus of 195,000 and the previous reading of 371,000 (revised to 324,000). Similarly, the annualized quarterly rate of U.S. real GDP in the second quarter fell to 2.1% from the initial forecast of 2.4%, and the GDP price index also fell to 2.0% from the initial forecast of 2.2%. Also, the flash personal consumption expenditures (PCE) price index fell to 2.5% annualized quarterly rate from 2.6% previously and expected.
However, a number of Chinese banks slashed mortgage rates, raising expectations for more stimulus measures from China, which in turn restored sentiment and dampened safe-haven demand for the dollar, especially amid concerns about a dovish Fed.
Under the influence of the above factors, the 10-year U.S. bond yield is still under pressure at the lowest level in three weeks, about 4.11% as of press time. Although U.S. stocks retreated before the close, they still closed out. positive line.
Looking ahead, the Fed’s preferred inflation measure, the U.S. core personal consumption expenditures (PCE) price index for August, will be key to accurately predicting the direction of the U.S. dollar index. Also important are secondary economic activity and employment data. If these data remain weak, the dollar index could end its six-week-old uptrend.
