The highly awaited US Nonfarm Payrolls data will be released on Friday, following some encouraging US economic indicators on Thursday. Data from Japan, including household spending, bank lending, and the leading index, will be released during the Asian session. Germany will report its Industrial Production numbers later today. Statistics on Canada’s labour market will also be released.
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While it fell against the Euro, the British pound, and the Japanese yen, the US dollar rose substantially against commodity currencies. Positive US statistics increased speculation that the Federal Reserve (Fed) will raise interest rates again, which impacted on US stock prices. The Australian Dollar, the Canadian Dollar, and the New Zealand Dollar all fell as market sentiment deteriorated and commodities prices fell.
On Friday, the Dow Jones dropped 1.07%, while the Nasdaq fell 0.82%. Positive US statistics likely contributed to the drop since investors are expecting the US Federal Reserve to tighten monetary policy further. Yellen, US Treasury Secretary, is now in China. Threads by Meta is a new social network.
An rise of 497k in private payrolls was reported by Automatic Data Processing (ADP), which was significantly more than the 228k expected by the market. While new claims for unemployment increased to 248,000, the number of those still collecting benefits dropped to 1.72 million, the lowest level since February. In June, the ISM Services PMI increased from 50.3 to 53.9, while the Employment Index reached 54.4. The number of job openings reported by the JOLTS database fell from 10.3 million in April to 9.8 million in May, which was somewhat below estimates.
Government bond rates increased in both Europe and the United States as the data dropped. The yield on 10-year Treasuries rose to 4.06%, matching the high point of the year, while the yield on 2-year bonds reached 5.11%, its highest intraday level since 2007.
The weekly US jobs data is expected on Friday. The general assumption in the market is that the economy added 225,000 jobs in June, but new information has investors hoping for a better result. It is anticipated that the unemployment rate would drop from 3.7% to 3.6%. Income data will also be examined by market players. If the data show that the labour market is still tight, the Fed is more likely to raise rates again. On the other hand, the US inflation statistics from next week will be crucial.
The Eurozone’s retail sales fell by 2.3% in May, but German factory orders rose by 6.4%, according to data released on Thursday. On Friday, May’s Industrial Production numbers for Germany will be released. During the European session, European Central Bank official De Guindos is expected to speak. The EUR/USD pushed as high as 1.0830 twice before bouncing back near 1.0900. The Euro strengthened as yields in the Eurozone rose.
Despite bad US statistics and risk aversion, the GBP/USD pair had its best daily finish in a week above 1.2750. The Euro to Pound exchange rate, however, has recovered from its weekly lows to 0.8550.
Despite an increase in government bond rates on Thursday, the Yen fared well. The downturn in stock markets provided support for the currency. The USD/JPY pair fell, but recovered to close well above the 144.00 level. For the couple, it was the worst day in the past 30 days. Household spending, bank lending, and the Leading Economic Index are all scheduled for release in Japan this coming Friday.
After falling for a second day in a row, the AUD/USD pair stabilised around the 0.6600 level. The New Zealand dollar/United States dollar exchange rate retreated from weekly highs and was rejected over 0.6200.
On Thursday, the USD/CAD rose for a second consecutive day, gaining 150 pips as it neared 1.3400 as the Loonie lagged. Despite predictions of a surplus of $1.5 billion, Canadian trade figures for May showed a loss of $4.3 billion, the greatest such swing in history. On Friday, Statistics Canada will release its Employment Report. The unemployment rate is predicted to climb from 5.2% to 5.3% in June, while a net gain of 20,000 jobs is anticipated for the month.
The US dollar against the Mexican peso had its finest day in months on Thursday. It rose from its yearly low of below 17.00 to a new high of 17.38.
As rates rose, metal prices fell. Although gold dropped $10, it stayed over $1,900, and silver dropped 1.75 percent, going as low as $22.50 and wiping out its weekly gains. After the United States released some bad statistics, cryptocurrency prices dropped. Both Bitcoin and Ethereum saw losses, with the latter falling to $1,880 and the former to $30,260.
