The latest data on job creation in the US private sector has shown weaker growth than expected, putting pressure on the US dollar. According to fresh ADP estimates, only 150,000 jobs were created in June, the lowest since January. The leisure sector led the growth with 63,000 new jobs, while construction surprisingly saw a net job growth of 27,000 despite a collapse in lumber prices.

However, the mining and manufacturing sectors saw a decline in employment, serving as a wake-up call for the labor market. The service sector continues to show impressive growth momentum, which could be a factor in pushing inflation higher.

Weekly jobless claims are also on the rise, indicating a new phase in the labor market. The four-week moving average of initial claims increased to 238,500, with a 15,500 increase for the month. Continued claims also rose by 45,000, raising concerns about the upcoming Non-Farm Payroll (NFP) numbers.

Additionally, indicators of foreign trade activity have shown a widening trade deficit of $75.1 billion in May, the highest since October 2022. The growth of imports outpaced exports, further straining the US dollar.

Overall, these negative data points are putting pressure on the dollar and increasing the likelihood of a rate cut by the Federal Reserve. The market now gives a 68% chance of a rate cut in September, up from 62% a week ago and 59.5% a month ago. This suggests that investors are bracing for a potential shift in the Fed’s monetary policy.

In conclusion, the recent data on job creation, weekly jobless claims, and foreign trade activity all point towards a challenging environment for the US dollar. Investors should closely monitor upcoming economic indicators and Fed announcements to navigate through these uncertain times in the financial markets.