Private payroll weakened, US dollars broken?

The US dollar is monitored to withdraw from its highest level in various major currency pairs, but the market is still lacking catalysts.

Some US economic data releases last night showed disappointing numbers. Consequently, the US dollar exchange rate weakened. The US dollar index (Dxy) was corrected to 106.70s in the Asian session on Thursday (5/October) and Greenback took a gift back to various other major currencies.

Private payroll weakened, US dollars broken?

The ADP employment report shows the weakening in private payroll data in Uncle Sam's State. The number decreased from 180K in August to 89k in September, even though consensus only anticipated a decline to 153K.

S&P Report reveals setbacks in the US service sector. Purchasing Managers' Index (PMI) scores for this field weakened from 50.5 to 50.1 in the September 2023 period, aka slightly missed from the estimated consensus estimated at 50.2.

ISM report on the US non-manufacturing sector as expected, but both are not encouraging. Non-manufacturing PMI scores recorded weakened from 54.5 to 53.6 in September 2023, with labor sub-dindex falling from 54.7 to 53.4.

The series of reports sparked concerns about the release of non-farm payroll data tomorrow. Consensus while estimating NFP only weakened from 187K in August to 163K in September, but the decline in ADP and Non-Manufacturing Employment Data opens the possibility of sharper weakening.

"This morning service sector data helped soften expectations ahead of the Non-Farm Payroll report on Friday, and we have witnessed a decline in the opportunity to increase further interest rates from the Federal Reserve before the end of the year," said Karl Schamotta, Head of Market Strategy in Corpay, as referred to Quoted by Reuters, "More broadly, the surge in the Treasury yield and dollar rally seem to reach the saturation point."

The US dollar is monitored to withdraw from its highest level in various major currency pairs, but the market still lacks catalysts for more significant trend changes. The market seems to be entering the wait-and-see mode faster ahead of the release of non-farm US payroll tomorrow.

USD/JPY moves in a very narrow range around 149.00, signifying the fear of the market to touch the controversial 150.00 threshold. GBP/USD and EUR/USD stretched thinly near the lowest level of multi-month. AUD/USD and NZD/USD also try to crawl up, but are still constrained near the lowest level since November 2022 because of the more Dovish central bank decision this week.