US Dollar (USD) Firms following Strong Payrolls
The US Dollar (USD) rallied on Friday after the latest non-farm payrolls report smashed forecasts. The US economy added 339,000 jobs in May, rather than the forecast 190,000, which prompted bets on a Federal Reserve rate hike this month, thereby boosting USD.
However, the safe-haven ‘Greenback’ found its gains capped amid an improving market mood. A larger-than-forecast jump in the US jobless rate also limited the currency’s upside.
Looking ahead, the ISM services PMI is the focus for USD investors today. Will an expansion in the US services sector boost the ‘Greenback’? Or will the data cheer markets, thereby denting the safer currency?
Pound (GBP) Retreats amid Lack of Data
The Pound (GBP) fell on Friday, trimming the gains it made over the course of the week, without a clear catalyst for the movement.
Sterling may simply have entered overbought conditions, with investors repositioning at the end of the week’s trade. An absence of UK data left GBP lacking support.
Turning to the session ahead, the UK’s final services PMI could impact the Pound this morning, if it differs from the preliminary result. Could another upward revision see Sterling climb?
Euro (EUR) Stumbles amid USD Recovery
The Euro (EUR) slipped against its stronger peers at the end of last week’s trade despite hawkish signals from some European Central Bank (ECB) rate setters.
EUR’s negative correlation with a recovering US Dollar put pressure on the common currency, while a risk-on mood also dampened the safer Euro’s appeal.
This morning, the single currency could face headwinds. A confirmed slowdown in Eurozone private sector activity and a contraction in PPI may dent ECB rate hike bets.
Canadian Dollar (CAD) Gains Ground as Oil Prices Rise
The Canadian Dollar (CAD) climbed at the end of last week, with rising oil prices supporting the crude-linked currency.
Movements in the oil market could continue to impact CAD today. Could output cuts from some of the world’s largest oil producers see crude prices strengthen, thereby boosting CAD?
Australian Dollar (AUD) Wavers as China Tensions Offset Data
The Australian Dollar (AUD) was mixed in overnight trade. Upbeat Chinese data and an uptick in Australian monthly inflation supported the ‘Aussie’, while simmering Sino-American tensions offset the upside.
New Zealand Dollar (NZD) Wobbles amid Tepid Risk Appetite
The risk-sensitive New Zealand Dollar (NZD) also traded without a clear direction last night, as China-US concerns and positive Chinese economic data led to a mixed market mood.