The U.S. Dollar is weakening due to disappointing labor market data, with Non-Farm Payrolls adding only 22,000 jobs in August, far below expectations, and manufacturing seeing a sharper-than-expected contraction. This has increased the likelihood of the Federal Reserve cutting interest rates, with odds of a 25 basis-point cut at the September 17th meeting now above 100 percent. Meanwhile, the Euro is gaining strength, reaching levels not seen since mid-July, as markets anticipate Fed rate cuts, while the European Central Bank is expected to hold rates steady. The Mexican Peso is also benefiting from the Dollar’s decline, supported by high interest rate returns and upcoming inflation and industrial production data that could influence Banxico’s policy decisions.
