Dollar Slips as Stocks Recover

Economic Indicators - The US February ADP employment change increased by +63,000, surpassing expectations of +50,000 [2] - The US February ISM services index unexpectedly rose by +2.3 to 56.1, better than the anticipated decline to 53.5, marking the strongest pace of expansion in 3.5 years [3] - The Eurozone January PPI rose by +0.7% month-over-month and fell by -2.1% year-over-year, stronger than expectations of +0.2% month-over-month and -2.6% year-over-year [5] - The Eurozone January unemployment rate fell by -0.2 to a record low of 6.1%, better than expectations of 6.2% [6] Currency Movements - The dollar index (DXY00) is down by -0.13%, pressured by a rally in stocks following a report on potential discussions to end the war involving Iranian operatives [1] - The EUR/USD is up by +0.16%, supported by the weakness in the dollar and positive Eurozone economic reports [5] - The USD/JPY is down by -0.30%, with the yen strengthening due to a rise in Japan's February consumer confidence index to a 6.75-year high [7] Central Bank Outlook - The FOMC is expected to cut interest rates by about -37 basis points in 2026, while the Bank of Japan (BOJ) is anticipated to raise rates by +25 basis points in the same year [4] - Swaps markets are discounting a 0% chance of a -25 basis point rate cut by the European Central Bank (ECB) at its next policy meeting on March 19 [6]