Forex Today: Dollar beats only majors as markets cool, last NFP hints eagerly awaited

Here is what you need to know on Thursday, September 3:

The US dollar continues gaining ground against the euro, pound, yen, and also gold but is losing some ground to commodity currencies. Hopes for a coronavirus vaccine fuel markets and two hints towards Friday's jobs report are eyed after disappointing outcomes beforehand. 

The ISM Services Purchases Managers' Index is the main data point on the agenda, serving as a gauge for the sector and also as a clue toward Friday's Non-Farm Payrolls.

See ISM Services PMI Preview: Low bar opens door to (temporary) dollar bounce

It follows an upbeat headline ISM Manufacturing PMI, albeit with a weak employment component. ADP's private-sector labor figures fell short of estimates with only 428,000 positions gained in August, yet the payrolls firm has been off the mark in recent months. 

Investors will also be watching weekly jobless claims, which are set to drop below one million once again. Continuing claims are also projected to extend their gradual fall. 

Stock markets rose on Wednesday, inspired by the administration's desire to distribute coronavirus vaccines – potentially by Moderna and Pfizer – as early as October. Some fear that the Center for Disease Control (CDC) is succumbing to political pressure to rush immunization before the elections. S&P 500 futures and markets outside America are already more cautious on Thursday. 

In US politics, an influx of polls has shown that President Donald Trump only marginally narrowed the gap with challenger Joe Biden as the dust settles from the party conventions. Implied volatility on VIX futures is pointing to considerable swings in markets around the vote.

EUR/USD has been extending its downfall, partially an extended counter-trend to Fed-fueled dollar strength, but also due to additional reports of concerns – the European Central Bank is worried that the stronger euro would jeopardize the recovery. Phillip Lane, the ECB's Chief Economist, said that officials are watching the exchange rate. Services PMIs are on the agenda.

GBP/USD has also been on the back foot, retreating from the highs. Andrew Bailey, Governor of the Bank of England, reiterated his position that setting negative rates is in the toolbox but not under consideration at the moment. His colleagues at the BOE told MPs that the recovery may be long. Bailey speaks again on Thursday. 

USD/JPY is edging higher as politicians in Japan's ruling LDP party are gearing up for a contest to replace outgoing Prime Minister Shinzo Abe.

Commodity currencies are edging higher, with the Australian and New Zealand dollar shrugging off fresh Sino-American tensions. The US is limiting the movement of Chinese diplomats in retaliation to similar moves by Beijing. The world's largest economies have been exchanging heated rhetoric about Taiwan. 

Gold has been ticking down, maintaining its inverse correlation with the greenback. Oil prices dropped from their highs despite inventory data pointing to a higher than projected drawdown. 

Cryptocurrencies remain depressed after dropping on Wednesday, with Bitcoin trading around $11,300 and Ethereum shying away from $450. 

More Facing the elephant in the room – The US elections are getting close