The US Dollar (USD) is tracking a little higher overall on little or no new developments. The minor lift in the USD may simply reflect a mild rebound from yesterday’s losses as the Dollar Index (DXY) remains well within recent ranges, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

USD firms modestly but holds broader range in quiet trade

"High beta/developing market FX is bearing the brunt of the decline versus the USD, with the AUD leading losses among the core major currencies. A sharp fall in Chinese stocks earlier, reflecting reports that regulators are considering measures to cool market gains, may be a factor here. Beyond that, however, markets appear to be shrugging off yesterday’s Beige Book, which reported generally flat activity across the US economy, and the JOLTS data, which reflected a further slowing in the US labor market and some further drift in US yields."

"Job openings in July fell by more than expected and June data was revised lower. The fall in job openings came in areas that had previously provided leadership (government, health). This morning’s ADP jobs data at 8.15ET is expected to reflect slower private sector hiring in August, meanwhile. Although the ADP data does no track the NFP report that closely on a month-by-month basis, the broader trend in in the two reports (observed via the 6m average, in the chart below) shows a closer alignment, especially over the past year."

"Both series clearly reflect a clear slowing in the US labour market. Just how weak the jobs picture looks in August will shape expectations for Fed policy changes at the September 17th FOMC and perhaps beyond. In addition to the ADP report, US weekly claims, Productivity, Trade and ISM data are out this morning. Fed Presidents (voters) Williams (hawk) and Goolsbee (dove) are speaking. Japan releases Cash Earnings and Household Spending data this evening."