The US economy added only 75k jobs against the 185k expected in May while wage growth disappointed by rising 0.2% versus the 0.3% month-on-month expectations. Although the unemployment rate held at a 49-year low of 3.6%, the overall flavor of the report was quite sour and this continues to be reflected in the Dollar’s valuation. Market speculation over the Federal Reserve cutting interest rates is set to intensify following today’s underwhelming jobs report. With labor markets showing some cracks, and concerns rising over persistent trade tensions negatively impacting the US economy, Dollar bears may take full control of the driver’s seat sooner than expected.
Looking at the technical picture, the Dollar Index (DXY) remains under pressure on the daily charts. A weekly close below 96.50 is seen opening a path towards 96.00 in the short to medium term.
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Lukman Otunuga is a research analyst at FXTM. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in the various factors affecting the currency and commodity markets.
