Forex Daily Recap – US Employment Data Confirming Fed Rate Cut Possibility

Crude Oil prices upsurged 2% on Friday’s session, marking day’s high near $54.31 bbl as Saudi affirmed Supply Cuts for the rest of 2019. Trump continues his stance to impose Mexican tariffs from Monday.
Nikhil Khandelwal
Non-farm employment change, payrolls or NFP.

USD Index

Traders had developed a slight optimism around the Buck in the Asian session on EUR/USD fall. The US Dollar had dived down away from 97 levels in the last two sessions. But, the Index managed to rebound after striking 96.80 levels. Anyhow, the pair couldn’t find support near 96.80 levels today. The tumble rally took the Greenback towards week’s lowest vicinity marking daily/weekly low near 96.47 levels.

The USD-specific influencing events came out at 12:30 GMT. The US May Non-Farm Payrolls broadcasted 75K figures over the 185K market expectations. Hence, a fewer number of jobs created last month shows strong signs of weakness in the economy. The market now expects the Fed to come up with a rate cut earlier this year mostly by July. The Average YoY Hourly Earnings came out 0.1% lower than the market hope of 3.2%. May Labor Force Participation Rate also mentioned poor figures further weakening the Greenback.

US Dollar Index 60 Min 07 June 2019

EUR/USD

The Euro pair had started trading on Friday session near 1.1276 levels and continued the upward rally crossing 1.1300 levels. The pair displayed a slight downshift in the early hours amid adverse Switzerland and German data. At around 05:45 GMT, the Swiss May MoM Unemployment Rate came out in-line with the market expectation of 2.4%. Laterwards, German April YoY Industrial Production data reported -1.9% over -0.4% estimates. The slow degradation in the EUR/USD pair continued as German April Trade Balance reported €1.6 Billion lower than the €18.6 Billion estimates. After touching the pivotal 1.1251 levels, the pair shifted gears and took the upward journey. The positivity in the Fiber appeared after the release of sparse USD data. The US reported lower-than-expected May Non-Farm Payrolls and Average Hourly Earnings. As the Euro currency makes up the 50% portion in the USD Index, the Fiber shot up on Greenback failure. The EUR/USD pair got elevated and marked the daily high near 1.1347 levels. From the weekly point of view, the pair remains almost 1.58% higher over last week closing mark.

USD/MXN

The Mexican Peso pair managed to uptrend after making the Friday opening near 19.6683 levels in the Asian trading session. The positive trend in the pair attempted twice to breach the 19.7890 resistance levels twice today. However, the pair couldn’t make a breakthrough instead cooled down to 19.5606 low levels. US President continued to remain stubborn over imposing 5% Mexican tariffs from Monday. Trump warned that the taxes would increment each month, reaching 25% by October.

USDMXN 60 Min 07 June 2019

Anyhow, Mexican President Lopez Obrador stays optimistic about retaliating soon and points over Trump’s mistake to link trade with migrants. Mexico would likely use China’s tactic of a tit-for-tat trade war with the US counterpart. Seeing the countries battling with trade tariffs Russian President Vladimir Putin accused the US today of “unbridled economic egoism”

 

USD/CAD

After making the opening on Friday trading session near 1.3353 levels, the USD/CAD pair remained sustained within 1.3343/68 range. However, the pair lost hold of the range-bound phase later as adverse US events came out. The Loonie pair slipped straight from 1.3365 levels landing near 1.3264 levels. The fall in the pair developed after the release of lower-than-estimated US May Non-Farm Payrolls and Average Hourly Earnings. The Greenback touched the three-month low mark of 96.46 levels today.

Meanwhile, the Crude Oil prices upsurged 2% on Friday’s session, marking day’s high near $54.31 bbl. The upliftment in the commodity came up over multiple reasons. First, the OPEC member Saudi addressed that they would continue with supply cuts through the rest of the year. Second, the Market expectation over Fed rate cuts got stronger after the release of weak US Employment data. A Fed rate would weaken the Greenback and would strengthen the Crude demand among buyers possessing other currencies.

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