Forex Today: US Dollar stabilizes following PMI-inspired selloff

Eren Sengezer FXStreet

Here is what you need to know on Tuesday, June 4:

The US Dollar (USD) holds steady against its major rivals early Tuesday after suffering large losses in the American session on Monday. April Factory Orders and JOLTS Job Openings data will be featured in the US economic docket in the second half of the day.

The data from the US showed on Monday that the ISM Manufacturing PMI dropped to 48.7 in May from 49.2 in April, showing an ongoing contraction in the manufacturing sector's business activity at an accelerating pace. Additionally, the inflation component of the survey, the Prices Paid Index, dropped to 57 from 60.9, highlighting a softer input inflation. The USD Index declined sharply following these data and touched its lowest level since early April, losing over 0.5% on a daily basis. The USD Index fluctuates slightly above 104.00 in the European morning and the benchmark 10-year US Treasury bond yield stays near 4.4% after falling nearly 2.5% on Monday. Finally, US stock index futures trade marginally lower on the day.

Economic Indicator

JOLTS Job Openings

JOLTS Job Openings is a survey done by the US Bureau of Labor Statistics to help measure job vacancies. It collects data from employers including retailers, manufacturers and different offices each month.

Last release: Wed May 01, 2024 14:00

Frequency: Monthly

Actual: 8.488M

Consensus: 8.69M

Previous: 8.756M

Source: US Bureau of Labor Statistics

Bank of Japan (BoJ) Governor Kazuo Ueda said on Tuesday that they will adjust the degree of monetary support if underlying inflation were to continue to move in line with their projections. Meanwhile, Japanese Finance Minister Shunichi Suzuki noted that the forex intervention was intended to respond to speculative moves and added that it had some effects. Following Monday's drop, USD/JPY holds steady at around 156.00 in the European morning on Tuesday.

EUR/USD gathered bullish momentum and advanced to its highest level since late March above 1.0910. The pair stays in a consolidation phase near 1.0900 early Tuesday.

GBP/USD took advantage of the selling pressure surrounding the USD and advanced to the 1.2800 area.

Following a modest decline seen in the first half of the day, Gold reversed its direction and climbed above $2,350 on Monday, rising over 1% on a daily basis. XAU/USD stages a technical correction and trades at around mid-$2,340s in the European session.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

GBP/USD stays firm near 1.3350 amid easing Mideast tensions

GBP/USD builds on Friday's modest bounce from a three-week low and gains strong follow-through positive traction at the start of a new week on Monday. This marks the second straight day of gains, with the major trading near 1.3350 in European trading amid a pause in the Middle East conflict and a broadly weaker US Dollar. Traders brace for the Fed and BoE policy announcements later in the week.

EUR/USD holds gains near 1.1400 as USD slips on Iran diplomacy hopes

EUR/USD holds sizeable gains near the 1.1400 mark in the European session on Monday. The intraday strength is sponsored by a broadly weaker US Dollar, weighed down by renewed optimism over a diplomatic resolution to end a five-month-old US-Iran war.

Gold sticks to gains as falling oil ease inflation fears and temper Fed rate hike bets

Gold (XAU/USD) sticks to modest intraday gains heading into the European session on Monday, though it struggles to build on the momentum beyond the $4,100 mark as bulls seem hesitant ahead of the crucial FOMC meeting this week. In the meantime, reviving hopes for a diplomatic resolution to end a five-month-old US-Iran war led to an intraday slump in crude oil prices.

Cardano: Under pressure as bearish derivatives cap recovery

Cardano remains under pressure, trading lower at $0.165 on Monday after mild losses in the previous week. Weakening derivatives metrics and subdued momentum indicators suggest that ADA's upside move remains limited, keeping downside risks in focus. Derivatives data for Cardano shows bearish sentiment among traders.

Australian Dollar outlook: Chances of another rally won’t be decided in Canberra, but in Washington

The Australian Dollar rode a rollercoaster in the first half of the year, hitting a four-year high and then correcting. The currency enters the second half with an outlook full of uncertainty due to renewed hostilities in the Middle East, which clouds the inflation outlook and interest rates.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.