The U.S. dollar has had a strong week and the greenback extended those advances modestly overnight.
Overview
A slew of strong data earlier this week has allowed the greenback to pullback from multi-year lows against a number of its counterparts. The Bloomberg Dollar Spot Index is at the strongest level since May 14th.
All eyes are on this morning’s non-farm payrolls, a day following strong weekly jobless claims and ADP private jobs data. Non-Farm payrolls rose 559K in May, missing estimates of 675K but better than the awful print of 278K the month prior. On the plus side, the unemployment rate fell to 5.8% from 6.1%, the lowest level since the beginning of the pandemic.
The knee-jerk reaction to the numbers was dollar negative. For example, the Euro popped about three-tenths stronger in the first five minutes after the release.
While labor data will steal today’s headlines, U.S. factory and durable goods orders due out at 10 a.m. deserve our attention
What to Watch Today…
- Durable Goods and Factory Orders at 10 a.m.
EUR ⇓
The Euro has fallen to a three-week low versus the U.S. dollar yesterday. The greenback has experienced widespread strength and the Euro has proved to be a victim even as the bloc has published strong data this week including an impressive Eurozone Purchasing Mangers’ Index. There is not much in the way of risk events in Europe today so EUR/USD is likely to take its cues from the fallout of this morning’s U.S. jobs data which so far is dollar negative.
CAD ⇓
The Canadian dollar is slightly weaker this morning and is down 0.4% this week. The loonie has pushed to a 6-year high against the dollar in May as the price of oil and a hawkish central bank boosted the Canadian dollar. However, those highs may prove to be the top as the Canadian dollar is lower this week even as the price of West Texas crude oil continues to rise.
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