A look at the day ahead in U.S. and global markets by Dhara

Ranasinghe.

If the pressure on global markets from the tumult at the start

of the month has abated, nobody told the dollar.

The U.S. currency remains on the back foot -- trading near

its lowest level in more than a year versus the euro and

Britain's pound . The dollar index, reflecting

the currency's value against a basket of peers, is down 2.7% so

far this month and is set for its biggest monthly drop since

November.

For sure, the end of dollar resilience has long been

anticipated and long been proved wrong, given strength in the

economy and interest rates staying higher for longer.

Still, the latest developments suggest dollar pain will

continue for now. First, Wednesday's minutes from the Federal

Reserve's July meeting suggest the central bank appears to be

set for a September interest rate cut.

Second, data showed U.S. employers added far fewer jobs than

originally reported in the year through March, adding to a sense

that labour market conditions are weakening.

And third, data on Thursday shows euro zone business

activity displayed surprising strength in August despite firms

raising prices, potentially weakening expectations for two more

rate cuts from the European Central Bank this year.

Interest-rate futures are back to pricing in just over 100

basis points of Fed easing by year-end, compared to roughly 65

bps in the euro area.

Worth noting is that the ECB has already delivered a quarter

point rate cut.

Thursday's U.S. data calendar is light, with some focus on

the release of the S&P Global flash August snapshot of business

activity - the Purchasing Managers Index (PMI).

July U.S. existing home sales numbers are also due out.

U.S. stock futures were just a touch firmer, suggesting the

positive momentum on Wall Street could continue.

Oil prices are also in many people's sights after falling

for a fifth straight day on concern about weakening demand in

the global economy.

U.S. West Texas Intermediate crude, trading around

$71.64 in early London trade, is hovering near its lowest levels

since February.

Elsewhere, eyes are on plans for an unprecedented rail

stoppage in Canada that could badly damage its economy and have

a significant impact on cross-border trade with the United

States.

Canadian National Railway and Canadian Pacific Kansas City

have shut down their rail networks in the country on Thursday

and locked out nearly 10,000 workers after unsuccessful

negotiations with a major labor union.

The Canadian and U.S. economies are highly integrated, with

rail transport accounting for 14% of total bilateral trade of

roughly $382 billion between the countries for the first half of

2024, according to the U.S. Department of Transportation.

Vice President Kamala Harris, the Democrat candidate for the

Nov. 5 U.S. presidential election, will address the Democratic

National Convention in Chicago on its final night.

Key developments that should provide more direction to U.S.

markets later on Thursday:

* S&P Global Flash PMI August

* U.S. July existing home sales

* Auction of 30-year U.S. TIPS