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Forex Today: Dollar struggles to find demand ahead of key employment data

This is what you need to know to trade today Friday June 7:

The US Dollar (USD) is struggling to remain resilient against its rivals on the final trading day of the week, with the USD Index remaining near the multi-week low it set around 104.00 earlier in the week. The US Bureau of Labor Statistics will release the May employment report later in the day, which will include Nonfarm Payrolls, the unemployment rate and wage inflation figures.

US Dollar PRICE this week

The following table shows the percentage change of the US Dollar (USD) against the major currencies listed this week. The US Dollar was the weakest against the Swiss Franc.

USD -0.45% -0.45% -1.24% 0.28% -0.37% -1.00% -1.62%
EUR 0.45% 0.02% -0.80% 0.73% -0.06% -0.56% -1.20%
GBP 0.45% -0.02% -0.76% 0.69% -0.01% -0.64% -1.22%
JPY 1.24% 0.80% 0.76% 1.51% 0.94% 0.40% -0.21%
CAD -0.28% -0.73% -0.69% -1.51% -0.67% -1.27% -1.91%
AUD 0.37% 0.06% 0.01% -0.94% 0.67% -0.51% -1.17%
NZD 1.00% 0.56% 0.64% -0.40% 1.27% 0.51% -0.68%
CHF 1.62% 1.20% 1.22% 0.21% 1.91% 1.17% 0.68%

The heat map shows the percentage changes of the major currencies against each other. The base currency is chosen from the left column, while the quote currency is chosen from the top row. For example, if you choose the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change shown in the box will represent USD (base)/JPY (quote).

The US unemployment rate is expected to hold steady at 3.9% in May, while Non-Farm Payrolls are expected to rise by 185,000 following the weaker-than-expected increase of 175,000 in April. Annual wage inflation, measured by the change in average hourly earnings, is expected to remain unchanged at 3.9%. Ahead of labor market data, US 10-year Treasury yield remains flat around 4.3% and US stock index futures trade with slight gains on the day .

The European Central Bank (ECB) announced on Thursday that it reduced base rates by 25 basis points following the June policy meeting. This decision was in line with market expectations. At the press conference after the meeting, ECB President Christine Lagarde stopped short of confirming further easing in the near term, reiterating the data-dependent approach to policy going forward. The reaction of EUR/USD The ECB event was relatively subdued, but the pair managed to rise to the 1.0900 area. During European trading hours, Eurostat will publish revisions to first quarter GDP and employment change data. Meanwhile, Germany’s Destatis reported that industrial production declined 0.1% on a monthly basis in April.

In the Asian session, data from China showed exports rose 7.6% year-on-year in May, beating the market expectation of a 6% increase. In the same period, imports increased by 1.8%. After closing in positive territory on Thursday, the AUD/USD It stretched higher early on Friday and was last seen trading a few pips above 0.6670.

He GBP/USD posted small gains on Thursday but failed to gather bullish momentum. The pair trades in a narrow channel around 1.2800 early on Friday.

He USD/JPY It retreated below 156.00 on Thursday and continued to stretch lower. At press time, the pair is trading in negative territory below 155.50.

He Gold extended its weekly uptrend on Thursday and gained almost 1% on the day. XAU/USD is holding on to small daily gains early on Friday around $2,380.

economic indicator

Non-Agricultural Payrolls

The most important result contained in the employment report is the monthly change in non-farm payrolls published by the US Department of Labor. The report publishes job creation estimates for the previous month and revisions to the data for the previous two months. Monthly changes in payrolls can be very volatile and the publication of this report generates high volatility in the dollar. A result above the market consensus is bullish for the dollar, while a result below expectations is bearish.

Read more.

Last post: Fri May 03, 2024 12:30

Frequency: Monthly

Current: 175K

Dear: 243K

Previous: 303K

Fountain: US Bureau of Labor Statistics

The monthly US employment report is considered the most important economic indicator for currency traders. Published on the first Friday following the reported month, the change in the number of employees is closely related to the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers the evolution of the labor market when setting its policies, which affects currencies. Despite several leading indicators shaping estimates, Non-Farm Payrolls tend to surprise markets and trigger substantial volatility. Actual numbers that beat consensus tend to be bullish for the USD.

Source: Fx Street

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