The U.S. Dollar is trading in mostly tight ranges, tilting still towards the negative as markets cope with anxiety over data ahead of the release of Non-Farm Payrolls tomorrow.
Overview
Closing out the week will have plenty of turbulence as NFPs and the Employment Situation for May come out at a time when economists, as well as investors, cannot ignore the softening of recent readings from contractions to orders to underwhelming additions of private payrolls.
Additionally, other gauges of the labor sector are showing that layoffs have surely increased across industries, while job seekers are seeing fewer opportunities, and are looking much longer than in previous years, with the post-pandemic recovery. We take a dive into how this could keep Buck down in our June Monthly Outlook.
If Friday’s numbers come out with the negative implications expected, that there was lower job creation and Unemployment remained even, the Buck could see further deterioration. Anything shocking will add to the volatile environment and cause wild moves in either direction. Markets are also digesting developments regarding a travel ban overnight and will watch for comments out of a meeting in Washington, DC, between the U.S. President and German Chancellor today.
What to Watch This Week…
- US Nonfarm Payrolls, Friday 8:30 AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR ⇑
The Euro is currently trading in slightly stronger ranges while traders reacted to the European Central Bank interest-rate cut announcement at the time of writing. As expected, the ECB went ahead with a 25 basis-point haircut, but the shared currency is not naturally declining. In part, recent good news about European company earnings and adding to a global stock value record are keeping the euro near its best level since mid-April. Back then, it reached its highest level since November 2021. We will monitor how the presser by ECB President Christine Lagarde shapes the narrative. Thus far in her presser, Lagarde admitted risks to growth tilted to the downside. Euro resilient.
MXN ⇑
The Mexican Peso is quiet at the moment after having rallied against the U.S. dollar, naturally based on poor outcomes of U.S. indicators. It touched its best value over the dollar since August of last year. Meanwhile, Mexico is seeing better readings than expected from the data out this week, including May’s Consumer Confidence, which was more positive than estimated, while April’s numbers were revised to reveal more optimism behind it. Inflation remains a concern as tariffs could add to the costs of all imported goods into our Southern neighbor. Next week we will have more economic measures, such as the Consumer Price Index and Industrial Production, which are scheduled.
