The catalyst was apparently Some weak data from the US manufacturing sectorwhich fueled fears of a economic hard landingas traders prepared for crucial monthly payrolls data on Friday.
He yen strengthened around 0.1% to 145.325 per dollar at the start of the session in Asia after a rebounded 1% overnight against a broadly stronger dollar.
The US currency held steady at $1.1046 per euro after gaining 0.26% on Tuesday, and was stable at $1.3111 against the pound sterling after an increase of 0.23%.
He Australian dollar remained virtually unchanged at $0.67135 after the fall of 1.2% on Tuesday.
Volatility in the markets increases
The risks for the soft landing scenario that had been gaining traction recently in the markets caused traders to increase the odds of a rate cut.at the Federal Reserve interest rate by 50 basis points (bps) on Sept. 18 to 38% from 30% the previous day, according to CME Group’s FedWatch tool.
“The Markets are nervous ahead of the very important non-farm payrolls report on Friday that most market participants agree will be a significant factor, at least, in whether the Fed cuts by 25 or 50 percent,” said Gavin Friend, senior market strategist at National Australia Bank.
“All these asset movements point to a risk aversion view and a preference for safe havens, (with investors) taking a step back a bit.”
A US manufacturing indicator rose last month from an eight-month low in July amid an improvement in employment, but the overall trend continued to point to subdued factory activity, data showed on Tuesday.
Economists polled by Reuters expect that Friday’s report shows an increase of 165,000 U.S. jobs in Augustcompared with an increase of 114,000 in July.
Before then, Wednesday’s job openings data and Thursday’s jobless claims report will be in focus.
Source: Ambito
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