TSX higher on employment data
Investing.com - The U.S. dollar stabilized on Thursday following a bout of volatility in recent days, with traders remaining largely cautious as impending American jobs data loomed large and global bond markets were fragile due to concerns around overstretched debt levels.
By 04:50 ET (08:50 GMT), the U.S. dollar index, which measures the greenback against a basket of currency peers, had inched up by 0.1% to 98.19.
The dollar has largely whipsawed around the 98 point level this week, amid increasing speculation over whether the Federal Reserve will cut interest rates later at its upcoming September 16-17 policy gathering. Fed fund futures were pricing in a more than 97% chance the Fed will cut rates by 25 basis points at the meeting, CME’s FedWatch Tool showed.
Softer-than-anticipated job openings data furthered the notion that the American labor market was cooling, which in turn could spur the Fed into cutting rates to support the jobs picture. Several Fed officials raised such a possibility, after Chair Jerome Powell flagged the possibility of a September reduction at an economic symposium in Jackson Hole, Wyoming last month.
A closely-monitored monthly U.S. nonfarm payrolls due out on Friday is expected to offer more insight into the Fed’s rate trajectory. The labor market and inflation are the Fed’s major considerations when making policy decisions, although speculation has grown that officials may prioritize the easing labor market over signs of sticky price pressures.
On Thursday, investors will have the chance to parse through fresh weekly jobless claims figures, as well as a gauge of services sector activity from the Institute for Supply Management.
Meanwhile, recently jittery bond markets were somewhat calmed by comments from several Fed policymakers, including Governor Christopher Waller, which further bolstered wagers that the bank will soon resume slashing interest rates.
An auction of longer-dated Japanese government debt also saw tepid demand, but takeup was still enough to prevent fresh anxiety from gripping bond markets. The country’s 30-year bond yield had earlier spiked to an all-time peak. Yields tend to move inversely to prices.
Debt auctions are scheduled to take place later in the day in France and the United Kingdom, two countries which have been focal points in bond selling in Europe.
Against this backdrop, the euro was mostly flat, while sterling edged up by 0.1% to $1.3454 and the Japanese yen weakened marginally.
(Ambar Warrick contributed reporting.)