This is what you need to know to trade today Thursday June 2:
Rising US Treasury yields continued to help the US dollar on Wednesday and the dollar index DXY posted its biggest daily gain in a month. The DXY index remains in a consolidation phase below 102.50 early on Thursday as attention turns to the ADP private sector employment report and in weekly data from the Department of Labor on initial claims for unemployment benefits. The US economic calendar will also include unit labor cost data for the first quarter and Eurostat will release Eurozone PPI Producer Price Index figures.
See: Preview US ADP Jobs Change in May: Labor Market Moves Away From Center Stage
The OPEC+ will hold a meeting on Thursday and Reuters reported earlier in the day that the group was looking for a solution to offset the one million barrel per day drop in Russian production due to sanctions. The barrel of West Texas Intermediate WTI, which reached $120 earlier in the week, is now down 1.5% on the day near $113.
For his part, the president of the Federal Reserve of St. Louis, James Bullard, was skeptical on Wednesday about the chances of a recession. Similarly, Richmond Fed President Thomas Barkin told Fox Business that the latest data or actions by business executives they were not pointing to a recession. The benchmark 10-year US Treasury yield rose more than 2% on Wednesday and is now trading sideways, slightly above 2.9%. US stock index futures are up 0.2%-0.5%, suggesting market sentiment is improving early on Thursday.
The EUR/USD lost close to 100 pips on Wednesday, but managed to rally in today’s European session. Although the pair is trading positive, it remains below 1.0700 so far in the day. The chief policy officer of the European Central Bank (ECB), Francois Villeroy de Galhau, has reiterated on Thursday that inflation in the euro zone is too high and wide. “It is necessary to normalize the ECB’s policyVilleroy added.
The GBP/USD retraces the 1.2500 level on Thursday after suffering heavy losses on Wednesday. UK markets will be closed on Thursday and Friday. Therefore, the dollar’s market valuation should continue to boost the pair’s action.
After the decision of the Bank of Canada to raise its interest rate by 50 basis pointsup to 1.5%, the USD/CAD it dropped to 1.2600. However, falling crude prices hampered the strength of the commodity sensitive CAD and the pair recovered above 1.2650.
After falling to a new multi-week low below $1,830, the gold reversed its direction and rose towards $1,850. XAU/USD manages to hold up for now, but a further rise in US yields could affect gold and vice versa.
Driven by rising US yields, the USD/JPY extended its rise towards 130.00. On Thursday, Seiji Adachi, a member of the board of directors of the Bank of Japan, argued that trying to curb yen weakness by tightening monetary policy would reduce corporate funding.
After the decisive rebound at the beginning of the week, the Bitcoin came under selling pressure again and lost more than 6% on Wednesday. At time of writing, BTC/USD is trading sideways just below $30,000. The ethereum closed for the second straight day in negative territory on Wednesday and lost almost 10% during that period. ETH/USD is currently trading in a tight range near $1,800.
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
