The dollar index (DXY) fell by 0.08% on Wednesday, retreating from a 2.5-week high due to a weaker-than-expected U.S. August ADP employment change, which only increased by 38,000 against expectations of 47,000. Commenting on inflation trends, New York Fed President John Williams stated that inflation is continuing to trend down, further exerting pressure on the dollar.
In other economic data, U.S. July factory orders increased by 0.9% month-over-month, surpassing the forecast of 0.7%. The Federal Reserve’s Beige Book reported modest economic growth across its 12 districts and noted that the markets are currently pricing in a 65% probability of a 25 basis points rate hike in the next FOMC meeting scheduled for September 15-16.
WTI crude prices reached a six-week high amid heightened tensions in U.S.-Iran relations, but concerns eased after U.S. Energy Secretary Wright reported over 17 million barrels of oil passing through the Strait of Hormuz on Monday. Trade expectations indicate there is a 100% chance of a 25 basis points hike by the Bank of Japan at its upcoming meeting on September 18.
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