The dollar lost ground in European trade on Thursday against a basket of major rivals, extending losses for the sixth straight session and almost touching three-week lows following grim data.
The data showed the US economy has slowed down faster than expected in the second quarter, which boosts the odds of two Fed rate cuts this year.
The Index
The dollar index fell 0.15% today to 105.17, with a session-high at 105.36.
The index closed down 0.3% on Wednesday, the fifth loss in a row, marking three-week lows at 105.05.
Grim Data
Earlier data showed the US private sector added less jobs than expected in June, with the services sector unexpectedly shrinking.
The US private sector added 150 thousand new jobs in June, below estimates of 163 thousand.
The ISM services PMI contracted sharply to 48.8 in June, below market expectations of 52.6.
It’s the first such contraction for the services sector since January 2023.
US Rates
According to the Fedwatch tool, the odds of a September Federal Reserve rate cut rose to 73%, and to 84% in November.
Fed’s Minutes
The Federal Reserve released the minutes of its last policy meeting, which underlined the concerns of policymakers about the economic outlook and the persistent inflation above targets.
Some participants even said if inflation remained at current levels, there might be a need to raise interest rates.
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