Dollar continues to weaken for 3rd consecutive day

Markets this week

This week’s economic spotlight will be on the upcoming U.S. nonfarm payrolls report. In August, payroll growth reached 89,000 after a downward revision, falling short of the 164,000 jobs anticipated. At the same time, the unemployment rate eased from 4.3%.

Overall, the figures pointed to a softening in labor demand, a factor that several Federal Reserve officials cited as influencing their decision to implement a significant rate cut.

Economists are forecasting an addition of 144,000 jobs in September, a slight increase from the 142,000 recorded in the previous month. The unemployment rate is expected to remain steady at 4.2%, the same as in August.

In currencies

Japan's next prime minister hinted that monetary policy would remain accommodative, boosting the yen, while the U.S. dollar softened amid growing investor optimism about a possible recovery in China's economy.

The yen saw nearly a 2% surge on Friday after Shigeru Ishiba, a former defense minister and vocal opponent of Japan’s highly accommodative monetary stance, secured leadership and is set to take office. Currently, the yen is stabilizing around 142.90.

Last week, the U.S. Federal Reserve's preferred inflation gauge revealed a modest 2.2% rise for the 12 months ending in August, which led to a drop in U.S. Treasury yields and a weakening of the dollar.

Commodities

Oil prices dropped on Monday, marking a potential third consecutive monthly decline as concerns over ample supply and uncertain demand overshadowed fears of escalating conflict in the Middle East.

Brent crude fell to 71.40 per barrel, whilst U.S. West Texas Intermediate was last seen hovering close 67.90.