Before headlines about a possible replacement for the US Democratic candidate take centre stage again, the focus is on the first concrete US data for June: US Non-Farm Payrolls. The consensus figure was 190,000 (data came out at 206,000) after the very strong 272,000 in May, notes ING analyst Francesco Pesole.
Downside risks for the USD are present
“Risks were skewed toward a softer reading today following the big drop in the employment component of the ISM services index. To see a big revision in Fed rate expectations to the dovish side, however, we needed to see payrolls slow below 150,000 (which they didn’t) given that the Fed’s June dot plot and the perceived increasing likelihood of a Trump victory in November act as hawkish counterweights.”
“Over the summer months, we expect to see evidence that the U.S. labor market is at the kind of inflection point that some Fed members such as Mary Daly have referred to. We also think that further upside surprises in payrolls may have an asymmetric and more contained market impact following recent comments by Federal Reserve Chair Jerome Powell suggesting that the Fed recognizes that the headline numbers may overstate the true number.”
“We see downside risks to the dollar today, and expect the Dollar Index (DXY) to move below 105.00. A substantial revision in the Fed’s dovish bets may provide some respite to the yen, although we continue to view the Norwegian krone, and the Australian and New Zealand dollars as the G10 currencies best positioned for a US macro-data-led rally in high-beta FX.”
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.
