The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, currently trades near 98.30 during the Asian trading hours on Wednesday. The DXY attracts some sellers due to easing tensions in the Middle East. The US April ADP Employment Change report will be the highlight later on Wednesday.
US President Trump announced on Tuesday that he was pausing the US operation to escort commercial ships through the Strait of Hormuz “for a short period of time,” citing what he said was “great progress” toward an agreement with Iran. His statement came after US Secretary of State Marco Rubio asserted that the US had concluded combat operations against Iran and was fully focused on the new mission.
Data released by the Institute for Supply Management (ISM) on Tuesday showed that the Services Purchasing Managers Index (PMI) declined to 53.6 in April from 54.0 in March. This figure came in better than the forecast of 53.7.
The US Federal Reserve (Fed) decided to leave the benchmark federal funds rate at a target range of 3.50% to 3.75% following its April policy meeting. This marked the third consecutive hold as policymakers navigate persistent inflation and rising energy costs driven by conflict in the Middle East. Fed Chair Jerome Powell said last week during the press conference that the US central bank could drop its easing bias as soon as its June meeting.
All eyes will be on the US April jobs data later on Friday. Economists expect the US economy to have added 60,000 jobs in April, while the Unemployment Rate is estimated to remain steady at 4.3 during the same period. A sign of labor market deterioration could weigh on the US Dollar against its rivals.
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