The U.S. dollar is modestly weaker across the board this morning as global equities have ticked higher.
Overview
Risk sentiment improved this morning as the price of oil had declined. U.S. President Joe Biden is set to visit Saudi Arabia this month. Other reports indicate that the large oil producer may pump more oil, easing supply concerns.
This morning’s economy showed mixed signs of the tight labor market. Weekly jobless claims fell 11K to 200K last week, beating estimates. However, ADP reported that private firms only added 128K jobs in May, missing estimates of 300K.
The biggest risk event left on this week’s docket is tomorrow’s Non-Farm Payroll report. We believe a standout headline reading paired with an upward revision of last month’s impressive print will likely be the only combination that will allow the dollar to rally.
Market liquidity could be limited today as U.K. markets are shut for the next two days to celebrate the Queen’s Jubilee.
What to Watch Today…
- No major economic events scheduled for today
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CAD
The Canadian Dollar is up only 0.2% against the U.S. dollar this morning even as the price of oil declined. The price of WTI is down nearly a dollar and combined positive developments with Saudi Arabia. Traders are also weighing the fallout of the Bank of Canada’s widely anticipated decision to hike interest rates 50 basis points. The central bank indicated that they are ready to act more aggressively if inflation does not start to come down.
AUD
The Australian Dollar is rising and trading around its best level since the start of May based on a combination of monetary policy tightening as well as news that China will ease restrictions. The latter seems to be currently uplifting all currencies against the buck as it allows for optimism over the improvement of the supply chain.
Additionally, traders have increased bets that the Reserve Bank of Australia will not only continue to hike interest rates as they meet on June 7th, but also quicken the pace of cutting quantitative easing measures utilized to cushion the financial burden from the pandemic.
