U.S. Dollar Extends Slide Ahead Of U.S. Payrolls Data, Powell's Speech

The U.S. dollar extended its early weakness against other major currencies in the Asian session on Wednesday, as investors awaited revisions to U.S. payrolls data later in the day and the Federal Reserve Chair Jerome Powell's speech on Friday.

Traders are likely to analyze the minutes of the U.S. Fed's latest monetary policy meeting, which is to be released later in the day, for additional clues about the likelihood of a rate cut next month.

Later in the week, remarks by Fed Chair Jerome Powell and other Fed officials at the Jackson Hole Economic Symposium in Wyoming are also likely to attract attention.

According to CME Group's FedWatch Tool, there is a 73.5 percent of a quarter point rate cut next month and a 26.5 percent chance of a half point rate cut.

The U.S. dollar started trading lower against its major counterparts from 15th August 2024.

In the Asian trading today, the U.S. dollar rose to nearly an 8-month low of 1.1133 against the euro, from a recent high of 1.1116. The greenback may test support around the 1.13 region.

Against the yen and the Swiss franc, the greenback fell to 2-week lows of 144.94 and 0.8521 from yesterday's closing quotes of 145.25 and 0.8540, respectively. If the greenback extends its downtrend, it is likely to find support around 141.00 against the yen and 0.83 against the franc.

The greenback edged down to 1.3039 against the pound, from Tuesday's closing value of 1.3029. On the downside, the GBP/USD pair may test support near the 1.31 area.

Against the Australia and the New Zealand dollars, the greenback dropped to more than a 1-month low of 0.6753 and a 1-1/2-month low of 0.6164 from Tuesday's closing quotes of 0.6741 and 0.6152, respectively. The next possible downside target for the greenback is seen around .68 against the aussie and 0.63 against the kiwi.

The greenback edged down to 1.3613 against the Canadian dollar, from a recent high of 1.3625. The greenback is likely to find support around the 1.34 region.

Looking ahead, U.S. County employment and wages report for the first Quarter, U.S. MBA mortgage approvals data, Canada PPI and raw material price, both for July, and U.S. EIA crude oil data are slated for release in the New York session.

At 2:00 pm ET, U.S. Federal Open Market Committee (FOMC) minutes of its latest monetary policy meeting is set to be released.