US Dollar Index plunges to near 101.70 as investors await US NFP, risk-on sentiment buzz
- The DXY has slipped sharply to near 101.70 as the risk-on impulse has diminished the DXY’s appeal.
- The US economy may have generated lower employment in May.
- A preliminary estimate of the ISM Services PMI is hinting at underperformance.
The US dollar index (DXY) surrendered its entire gains recorded on Wednesday as investors were expecting an aggressive stance on the monetary policy announcement by the Federal Reserve (Fed), which is scheduled in the third week of June. The DXY faced sufficient barricades around 102.50, therefore bears dragged the asset lower to near 101.70. A slippage in the DXY is indicating a rebound in the positive market sentiment, which will keep the DXY on the tenterhooks.
US NFP in focus
The investing community is entirely focused on the release of the US Nonfarm Payrolls (NFP). The downbeat disclosure of the US Employment Change by Automatic Data Processing (ADP) on Thursday, is advocating dismal NFP figures. The ADP reported the Employment Change at 128k, which displays sluggishness in employment generation by the US economy. It is highly expected that the NFP will showcase the similar pattern displayed by the ADP. The NFP is forecasted at 325k vs. 428k reported earlier.
Also, the Unemployment Rate is expected to diminish to 3.5% from the prior print of 3.6%.
US ISM Services PMI
In today’s session, investors’ focus will remain on the release of the ISM Services Purchase Managers Index (PMI). A preliminary estimate of the ISM Services PMI is hinting at underperformance. The economic catalyst is expected to land at 56.4 against the prior print of 57.1.
Key events next week: Goods and Services Trade Balance, Initial Jobless Claims, Consumer Price Index (CPI), Michigan Consumer Sentiment Index (CSI).
Major events next week: Reserve Bank of Australia (RBA) interest rate decision, European Central Bank (ECB) monetary policy announcement.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
