The dollar tumbled 1% to 144.07 yen, a one-week low, as global financial markets generally avoided riskier assets
The dollar dropped against most major currencies on Wednesday after July U.S. job openings data suggested a weakening labour market, tilting the odds further in favour of larger interest rate cuts by the Fed.
Traders boosted bets that the Fed will deliver a half-a-percentage-point cut at its next meeting, following news that job openings in July declined to the lowest level in 3-1/2 years.
Friday’s U.S. payrolls report could offer further clues on the timing and pace of Fed rate cuts.
The U.S. central bank must not keep interest rates too high much longer or it risks causing too much harm to employment, Atlanta Fed President Raphael Bostic said on Wednesday.
The dollar index was 0.3% lower at 101.4. The dollar tumbled 1% to 144.07 yen, a one-week low, as global financial markets generally avoided riskier assets.
U.S. stocks remained weak after Tuesday’s sharp sell-off triggered by concerns about the U.S. economy and tech sector valuations.
Soft U.S. manufacturing data released on Tuesday helped fan worries about a hard landing for the country’s economy.
The dollar, which slipped more than 2% against major currencies in August, has stabilised as growing volatility in global financial markets lifted demand for safer currencies.
Stock market instability and declining U.S. yields have made the yen a strong performer, according to Marc Chandler, chief market strategist at Bannockburn Global Forex.
The dollar index was nearly 1% above its late August low of 100.51.
The USD has rebounded but is afraid to bounce back any further until it gets more information, Brad Bechtel, global head of FX at Jefferies, said in a note. After Friday’s print we will either be 100 or lower or 104 or higher in DXY by my reckoning.
