Dollar on the back foot as a turbulent quarter ends, ADP NFP eyed

Markets remain calm and the US dollar is shedding some ground amid end-of-quarter flows and ahead of the ADP jobs report. Eurozone inflation figures and speeches from Fed members are also eyed.

End-of-quarter flows: After the Federal-Reserve’s induced dollar rally in mid-June, investors seem to cash in on some of their greenbacks on the last day of the month and the quarter. On the other hand, stock markets remain near record levels and gold is consolidating at around $1,755, the lowest since April.

Fed members have been sending mixed messages. While Governor Christopher Waller called for cutting back on bond-buying, Thomas Barkin of the Richmond branch said that more economic progress is needed. Barkin speaks again on Wednesday.

ADP’s private-sector jobs report is set to show an increase of 600,000 positions in June, lower than what the payroll firm reported for May, 978,000. The correlation between ADP’s statistics and the official ones has weakened after the outbreak of the pandemic.

EUR/USD is hovering around 1.19 ahead of the release of preliminary inflation figures for June. The headline Consumer Price Index is forecast to moderate from 2% to 1.9% and Core CPI from 1% to 0.9%.

GBP/USD is trading around 1.3830 as worries about the spread of the Delta variant persist. Bank of England member Andy Haldane speaks later in the day. Final first-quarter GDP figures showed a drop of 1.6% QoQ against 1.5% initially reported.

USD/CAD is trading around 1.23 ahead of the release of Canada’s Gross Domestic Product data for April. AUD/USD is changing hands above 0.75, somewhat buoyed by upbeat Chinese Purchasing Managers’ Indexes.

Cryptocurrencies: Bitcoin has turned lower, trading around $35,000 after benefiting from institutional interest earlier in the week. Ethereum is consolidating its recovery.

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