Weak job openings boost bets for large Fed rate cut

The EURUSD currency pair is holding onto Wednesday’s recovery slightly below the round-level resistance of 1.1100 in Thursday’s European session.

The major cross bounced back sharply on Wednesday after the release of the weaker-than-projected US JOLTS Job Openings data for July boosted market expectations for the Federal Reserve to begin the long-awaited policy-easing cycle aggressively.

A sharp increase in market speculation for the Fed’s large interest rate cut this month weighed heavily on the US Dollar. The DXY Dollar Index, which tracks the Greenback’s value against six major currencies, extended its downside to near 101.20.

The JOLTS Job Openings data showed that job vacancies posted in July were lower at 7.67 million, from a downwardly revised 7.91 million in June and below the estimates of 8.1 million. Weak job market data came in as red flags to the labor market.

For meaningful updates on current labor market conditions, investors await the US Nonfarm Payrolls (NFP) data for August, which will be published on Friday.

In Thursday’s session, the US Dollar will be influenced by the ADP Employment Change and ISM Services Purchasing Managers Index (PMI) data for August.

Economists estimate that payrolls in the private sector rose by 145,000 from 122,000 in July. In the same period, activity in the service sector is projected to have expanded at a slower pace, with PMI coming in at 51.1 from the prior reading of 51.4.

Upbeat private payrolls and Services PMI data would diminish market speculation for Fed large interest rate cuts, while soft data would strengthen them.