USD is back under pressure after recovery to two-week highs
US equities extended losses on Wednesday, with tech and energy stocks leading the way lower. After a more than 2% drop during the previous session, the S&P 500 fell 0.2% overnight, while the Nasdaq gave up 0.3%. Bucking the trend, the Dow Jones managed a gain of 0.1%. In individual stocks, Nvidia fell 1.7% following a report that the U.S. Justice Department sent subpoenas to the company. On the economic front, job openings in the U.S. fell unexpectedly in July, adding to recession worries in anticipation of a key employment report due on Friday. For the week, the S&P 500 is down 2.3%, the Dow is down 1.4%, and the Nasdaq gives up 3.6% at this stage.
In Asia, equities were mixed on Thursday, trying to steady after a sell-off witnessed during the previous session. Nikkei 225 in Tokyo led the losses, digesting fresh economic data, which could give more room for raising rates by the Bank of Japan. The index fell 1.07% after a report showed that average monthly earnings rose 3.6% in July, down from the 4.5% climb in the previous month. Meanwhile, real wages rose 0.4% after a 1.1% jump in June. Elsewhere, South Korean Kospi shed 0.22%, Australia’s S&P/ASX 200 added nearly 0.3%, while Hong Kong’s Hang Seng fell 0.62%.
European stocks started the day on a softer tone, with pressure persisting these days. Regional stocks are now poised for a third straight day of declines. On the data front, Germany’s construction PMI came in at 38.9 in August versus 40.00 previously to deepen further in the contraction territory. Meanwhile, US stock index futures are little changed in early pre-market deals, with focus shifting to the US ADP employment report which could give markets some cues ahead of key Friday’s jobs data.
In currencies, the US dollar slipped from two-week highs registered earlier in the week. The USD index briefly peaked just below the 102.00 handle which seems to have spooked buyers. As a result, the greenback retreated to the 101.30 zone where the price is trying to steady on Thursday. Yesterday, the dollar was pressured by a weak job openings report which added to markets bets on a more aggressive rate hike by the Fed later this month. Should the selling pressure reemerge any time soon, the DXY may challenge the 101.00 figure, with traders nervous in anticipation of US jobs data due on Friday.
