During the Asian session, Australia published April data on mortgage loans. The key report of the day will be the US Nonfarm Payrolls. The US dollar remains under pressure as expectations of a Fed rate hike fall and market sentiment improves.
Here’s what you need to know on Friday, June 2:
On Thursday, US stocks rose amid improving market sentiment, helped by Chinese data and the resolution of the debt limit drama. The dollar fell across the board as yields in the US fell. US economic data showed a still strong labor market, slowing inflation and weak activity in the manufacturing sector. The mixed numbers prompted increased bets on a Federal Reserve pause at the June meeting and rate cuts later in the year.
- US: ISM Manufacturing PMI falls to 46.9 in May vs. 47 expected.
- US: Unit labor costs rise 4.2% in Q1 vs. 6% expected
- US: Initial weekly jobless claims rise to 232,000 vs. 235,000 expected
The Dollar Index suffered its worst drop in months, falling from 104.50 to 103.50. The 10-year US debt yield fell for the fifth straight day to 1.59%, the lowest level since May 18. The May jobs report is due out on Friday, with consensus pointing to a payroll increase of 190,000, up from 253,000 in April. These figures will be closely monitored. Even a positive report might not help the dollar if upbeat sentiment continues to prevail.
The EUR/USD pair extended its rebound from monthly lows, breaking above 1.0750. Eurozone inflation figures point to a slowdown in inflation. However, ECB President Lagarde stated that more rate hikes are on the way.
Comment from Commerzbank Research:
Following the sharp decline in energy prices, there is now also a correction in food prices, which had previously risen sharply. However, even more important from the ECB’s point of view is the fact that core inflation has probably peaked. This supports our view that the ECB will raise policy rates for the last time by 25 basis points in June.
The Pound remains one of the most profitable currencies of the week, with the Bank of England under pressure to do more to curb inflation in the UK. The pair GBP/USD It rose for the fourth day in a row, posting the highest daily close since May 10 and trading comfortably above 1.2500.
The Japanese yen performed well on Thursday, despite a rally in stocks, driven by falling government bond yields. USD/JPY fell for the third day in a row, bottoming out at 138.42; the pair has so far lost 180 points this week.
The weakness of the US dollar boosted the AUD/USD and to NZD/USD, and both pairs had their best day in weeks, rising to 0.6570 and 0.6070 respectively. In Australia, the Fair Work Commission (FWC) will announce the annual wage review on Friday.
The USD/CAD pair fell over a hundred points, while the Loonie held firm on the back of a recovery in crude oil prices, which rose over 3%. The pair bottomed at 1.3435, the lowest level in two weeks.
Emerging market currencies rallied against the US dollar, with the exception of the Turkish Lira, which hit fresh all-time lows and the USD/TRY pair topped 20.80 points.
The cryptocurrencies they did not benefit from the weak dollar and positive investor sentiment. Bitcoin lost ground, falling as low as $26,870, while Ethereum was flat around $1,870. Gold rallied back to the 20-day SMA around $1,980, and Silver rallied, approaching $24.00.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
