Early yesterday, the Euro slipped after climbing the day before above $1.19 against its US counterpart, the first time it has crossed the threshold since the start of 2015. In contrast to the political risks and monetary policy uncertainty that have plagued the Dollar, the Euro has drawn support from expectations that the European Central Bank would eventually begin phasing out its easy policy.
The US Dollar was on the defensive as well and Treasury Yields reversed an early gain after a pair of Federal Reserve speakers expressed caution over further rate hikes. St. Louis Fed President James Bullard said that he doesn’t support hiking rates further, while Cleveland Fed President Loretta Mester added to the cautious tone by saying that she’d lowered her estimate of inflation’s trigger point.
Moreover, a report by private payrolls processor ADP showed on Wednesday that private US employers added 178,000 jobs in July, slightly below economists’ expectations, although payroll gains in June were revised up to 191,000 from an originally reported 158,000. Investors expect the closely watched government employment report due today to show a solid expansion in US job creation.
Meanwhile, Oil dipped as a rally that has pushed up prices by almost 10% since early last week lost momentum with investors weighting the expansion of US production against Crude stockpiles. US Crude prices halted gains above $49 a barrel despite record gasoline demand of 9.84 million barrels per day (bpd) last week and a fall in commercial Crude inventories in the week to July 28 of 1.5 million barrels to 481.9 million barrels according to the US Energy Information Administration.