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The dollar index (DXY00) rose by 0.19% today due to mixed US economic reports. Key adjustments included a Q2 nonfarm productivity revision to 3.3% from 2.4%, exceeding the expected 2.7%, and a downward adjustment in Q2 unit labor costs to 1.0% from 1.6%, which was lower than the anticipated 1.2%. In contrast, the ADP employment change for August showed an increase of just 54,000, below the expected 68,000, while weekly jobless claims reached a 10-week high of 237,000, rising by 8,000.
The August ISM services index increased by 1.9 to 52.0, surpassing expectations of 51.1, marking the fastest expansion in six months. Federal funds futures indicate a 95% probability for a 25 bp rate cut at the September 16-17 FOMC meeting.
In the Eurozone, July retail sales declined by 0.5% m/m, against expectations of a 0.3% drop, marking the largest decrease in 13 months. This, combined with ongoing geopolitical tensions—like Germany’s call for secondary sanctions on Russia—continues to pressure the euro.
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