US Dollar weakens ahead of US employment data

The US dollar has slightly declined in value after significant gains against major currencies last week. However, the USD Index remains above 101.50, exactly reads 101.75 at the time of writing. This week’s high-level data releases, including the US jobs report, could affect the USD’s performance.

The US economy grew at a good rate in the second quarter, but labour market conditions remained tight. The JOLTS Job Openings data from the US Bureau of Labour Statistics will be released on Tuesday, followed by ADP’s private sector employment data on Wednesday and Nonfarm Payrolls data on Friday.

Investors will also be closely monitoring the ISM Manufacturing and Services PMI surveys. Inflation in the US fell to 3% yearly in June from 3.8% in May, below the market expectation of 3.1%. Personal Income and Personal Spending increased 0.3% and 0.5% on a monthly basis, respectively.

The real Gross Domestic Product expanded at an annualized rate of 2.4% in the second quarter, surpassed the market expectation of 1.8%. Markets are pricing in a 20% probability of a 25-basis-point Federal Reserve rate hike in September.