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USD/PKR tested early-July lows on Wednesday, after ADP reported decelerating job growth. US private businesses hired only 67 000 employees in November, the least since May and well below market consensus of 140 000.
A separate report by the ISM showed US services sector activity had slowed more than anticipated in November amid concerns over trade and worker shortages. As services account for over two thirds of US GDP, the data mounted additional pressure on USD.
These data points seem to have added to investor expectations of a rate cut. According to CME’s FedWatch Tool, as of December 4th, investors saw a 24.3% chance of a rate cut occurring at the Federal Reserve’s policy meeting in March, up from 15.9% a week ago.
Meanwhile, Pakistani annual consumer inflation was reported at 12.3% in November, accelerating from 11.08% in October.
The US Dollar Index was shedding 0.06% to 97.540 in late Asian trade on Thursday, after touching a fresh one-month low yesterday.
On the international scene, after Trump’s remarks on trade, US Commerce Secretary Wilbur Ross also rejected any deadlines on a US-China trade deal. He noted it was essential to ink a trade agreement that is favorable to the US rather than to rush through an agreement by the end of 2019. Ross added the two countries still had to iron out details of China’s purchases of farm products, some structural issues and an enforcement mechanism to reach an interim trade agreement.
As US-China trade frictions enter their 17th month, today’s focus will be on US trade balance report, scheduled at 13:30 GMT. The US trade deficit probably shrank to USD 51.5 billion in October, according to market expectations, from a deficit figure of USD 52.5 billion in September. The latter has been the lowest trade gap since April. In case the trade balance deficit shrank more than anticipated in October, this would have a strong bullish effect on USD, because of positive implications concerning economic growth.
Also at 13:30 GMT the US Labor Department will report on jobless claims. The number of people in the country, who filed for unemployment assistance for the first time during the business week ended November 29th, probably rose to 215 000, according to expectations, from 213 000 in the preceding week.
At 15:00 GMT Fed’s Vice Chairman for Supervision, Randal Quarles, will testify on Supervision and Regulation before the Senate Banking Committee in Washington. Traders will be looking for clues regarding Fed’s policy or US economic outlook.
USD/PKR was edging up 0.25% to 155.095 in late Asian session on Thursday.
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