FX.co ★ Dollar Weakens as Soft Data Fuels Economic Concerns

The US Dollar Index saw a decline, approaching 98.8 on Wednesday, moving closer to Tuesday's six-week low of 98.6. This comes as a result of weak economic data fueling renewed concerns about the US economic outlook. The recent ISM services PMI indicated that the sector contracted in May for the first time in nearly a year, primarily due to a steep decline in new business and an increase in input costs, likely influenced by new tariffs. Additionally, ADP figures showed that private sector employment increased by only 37,000 in May, the slowest rate since March 2023 and significantly below the anticipated 115,000. In contrast, the JOLTs report released on Tuesday revealed that job openings unexpectedly climbed to 7.39 million in April, surpassing the projected 7.1 million. The market is now closely watching Friday's nonfarm payrolls report for further insight into the Federal Reserve's potential policy direction. While President Trump continues to urge the Fed to cut interest rates, the officials have so far advocated a cautious stance amid escalating trade uncertainties.