The US dollar is under pressure following a combination of disappointing economic reports. The latest US job opening figures and a downbeat Beige Book have led to a broad decline in the dollar against most G10 currencies, with the Canadian dollar being a notable exception. Markets are now pricing in a more aggressive Federal Reserve policy, with futures indicating a 33% chance of two 50 basis point rate cuts by the end of the year across the remaining three meetings.
Meanwhile, equities are mostly lower, although markets in China, Taiwan, and Australia managed to post modest gains. Gold continues its recovery, rebounding from a nine-day low of $2,472 to settle near $2,496, and reaching a new weekly high just above $2,517. October WTI crude oil is currently consolidating.

Asia-Pacific Markets
Looking ahead, Japan is set to release July household spending data tomorrow. Analysts expect a year-over-year increase of 1.2%, following a 1.4% decline in June. However, household spending has generally been contracting on a year-over-year basis since November 2022, with only two exceptions.
The US dollar breached support near JPY 144 in North America yesterday and continued to weaken during the Asia-Pacific session, reaching nearly JPY 143. The Australian dollar also recovered as the broader decline in the greenback saw it peak near $0.6750 during the European session. Despite this recovery, it fell just short of the 50% retracement level from its August 29 high. The currency is trading within a narrow range today.

European Markets
German factory orders for July surprised on the upside, rising by 2.9%, contrary to economists' expectations of a 1.8% decline. Additionally, June's data was revised upward to a 4.6% increase from the initial 3.9%. Despite this, Germany’s industrial sector continues to face challenges.
In response to the dollar's broad decline following the JOLTS report, the euro climbed to $1.1095, reaching the 38.2% retracement level of its drop since the August 26 high. It has since firmed slightly to $1.1100, with the next retracement targets at $1.1115 and $1.1135.
The British pound, meanwhile, was halted at $1.3175 and remains stable, with initial support expected near $1.3140.

American Markets
The weaker-than-expected JOLTS report and a pessimistic Beige Book have dampened the dollar's recovery, fueling expectations for more aggressive easing by the Federal Reserve. Today, several key US economic data points will be released, including weekly jobless claims, the ADP private sector jobs estimate, and the services ISM report. While the weekly jobless claims data won't provide insights into tomorrow's employment survey, the market has already increased the likelihood of a 50 basis point rate cut by the Fed in the coming weeks.
The Canadian dollar outperformed its peers in the dollar-bloc currencies yesterday, partly benefiting from the US dollar's broader decline.