- DXY prints mild gains, up for the fifth day to poke April’s high.
- US Treasury yields wobble around weekly bottom following mixed data, hawkish Fedspeak, IMF comments.
- NFP expected to keep rate hike jitters on the table, likely offering further strength to greenback.
US dollar index (DXY) remains on the front foot around 92.58 during the early Friday. The greenback gauge versus the six major currencies refreshed multi-day high the previous day amid increasing chatters over Fed’s action and mostly positive US data.
US ISM Manufacturing PMI came in a touch softer than 61.00 expected and 61.2 previous readouts to 60.6 in June. This also joins the details relating to the employment component that dropped to 49.9 but the prices-paid sub-component jumped to the highest since 1979. On the contrary, Initial claims for last week fell to 364K, dragging down the four-week average to 392.75K, which in turn backs a strong NFP print that is expected to rise from 559K to 690K in June.
Following that data, Philadelphia Federal Reserve Bank President Patrick Harker told the Wall Street Journal that he supports the start of bond-buying pullback later this year. His hawkish statements precede the International Monetary Fund’s (IMF) comments suggesting an upward revision to 2021 GDP and rate hike calls during the second half of 2022, not to forget the start of tapering in early 2022.
It should, however, be noted that the market’s doubts over the global economic recovery due to the latest Delta covid variant outbreak seem to probe the DXY bulls of late. Additionally, fears that the key US jobs number, the NFP, will disappoint the markets and back the need for easy money add to the USD bulls’ worries.
It’s worth noting that the market’s indecision, as portrayed by the US Treasury yields and stock futures, also challenge the key US dollar index.
Moving on, DXY bulls will keep their eyes on the covid updates for the intermediate move but nothing will be more important than the NFP readouts, expected 690K versus 559K prior. Should the jobs report keep portraying strong recovery in the US labor conditions, the push for Fed’s monetary policy adjustments will be stronger and favor the USD buyers.
Read: NFP Preview: Four reasons why June's jobs report could be a dollar downer
Technical analysis
Although an ascending trend line from May tests DXY bulls around 92.70, bears are less likely to get convinced until the quote stays above the 200-DMA level of 91.43.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD trades with mild positive bias near 0.6700, RBA Meeting Minutes eyed
The AUD/USD trades with a mild positive bias near 0.6695 during the early Asian session on Monday. The weaker US Dollar provides some support to the pair. The markets remain unconvinced that the Fed will pivot earlier than previously expected.
EUR/USD gains ground above 1.0850, focus on Fedspeak
The EUR/USD pair trades on a stronger note around 1.0875 on Monday during the early Asian trading hours. The uptick in the major pair is bolstered by the softer Greenback. The Federal Reserve’s Bostic, Barr, Waller, Jefferson, and Mester are scheduled to speak on Monday.
Gold gains ground above $2,400, eyes on Fedspeak
Gold price gathers strength around $2,415 during the early Asian session on Monday. The softer US inflation data in April provides some support to the yellow metal. Meanwhile, the USD Index edges lower to 104.50, losing 0.03% on the day.
AI tokens could really ahead of Nvidia earnings
Native cryptocurrencies of several blockchain projects using Artificial Intelligence could register gains in the coming week as the market prepares for NVIDIA earnings report.
Week ahead: Flash PMIs, UK and Japan CPIs in focus. RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.