US Dollar Index (DXY) edges up above 98.00 ahead of key US releases
- The US Dollar Index bounced up from 98.00 lows but remains trapped within Wednesday's range.
- A weak Job Openings report on Wednesday boosted hopes of Fed easing and hammered the US Dollar's recovery attempts.
- Investors are looking from the sidelines, awaiting key US labour and services activity figures.
The Dollar is trading with marginal gains on Thursday. The Index has reached intra-day highs at 98.25 but is still trading within Wednesday’s range, as the market braces for the releases of the US ADP Employment Change and ISM Services PMI figures, due later on the day.
The US Dollar Index, which measures the value of the Greenback against a basket of major currencies, retreated from weekly highs at 98.60 on Wednesday, and bottomed at the 98.00 area following disappointing JOLTS Job openings, which boosted market hopes of a Fed cut in September.
Higher hopes of Fed easing are hurting the USD
To confirm those hopes, Fed Governor Christopher Waller reiterated that his calls for a rate cut in September, at a CNBC interview and pointed to “multiple interest rate cuts” in the next six months, adding negative pressure on the US Dollar.
The USD is trimming some losses on Thursday, as investors brace for the US ISM Services PMI and the US ADP report, which is expected to show further evidence that the US lab¡our market is losing momentum.
Investors’ reaction to these figures, however, is likely to be limited, as the market will remain expectant of Friday’s Nonfarm Payrolls report for a more accurate assessment of the Federal Reserve's near-term plans. The market consensus anticipates a relatively low employment creation in August.
Economic Indicator
ADP Employment Change
The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Thu Sep 04, 2025 12:15
Frequency: Monthly
Consensus: 65K
Previous: 104K
Source: ADP Research Institute
Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.
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Economic Indicator
ISM Services PMI
The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector, which makes up most of the economy. The indicator is obtained from a survey of supply executives across the US based on information they have collected within their respective organizations. Survey responses reflect the change, if any, in the current month compared to the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that services sector activity is generally declining, which is seen as bearish for USD.
Read more.Next release: Thu Sep 04, 2025 14:00
Frequency: Monthly
Consensus: 51
Previous: 50.1
Source: Institute for Supply Management
The Institute for Supply Management’s (ISM) Services Purchasing Managers Index (PMI) reveals the current conditions in the US service sector, which has historically been a large GDP contributor. A print above 50 shows expansion in the service sector’s economic activity. Stronger-than-expected readings usually help the USD gather strength against its rivals. In addition to the headline PMI, the Employment Index and the Prices Paid Index numbers are also watched closely by investors as they provide useful insights regarding the state of the labour market and inflation.
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