Greenback in spotlight as data highlights potential cracks in US economy…
Wednesday’s trading session was an incredibly volatile one for the US dollar which saw strong moves on the back of big data releases.
First up, the May private sector payrolls number, which is a component of Friday’s key US employment report, showed the worst increase in jobs since 2010! The number rocked markets and has tied in with a lot of the generally weaker data we’ve seen out of the US of late. The buck immediately sold off on the back of this number with GBPUSD pushing toward short-term resistance at $1.2750. However, these US dollar loses were pared as strong data in the form of ISM non-manufacturing printed well above forecast. Participants quickly scrambled to buy dollars back which saw the cable rate drop below $1.27. Both sets of data somewhat contradict one another which makes it all the harder to determine exactly what might be in store for the greenback moving forward. The next real test arrives on Friday with the all-important non-farm payrolls report.
It’s time for another European Central Bank announcement. The economic outlook in the eurozone has deteriorated since the bank’s last meeting. No doubt, many participants will be looking for a dovish performance from Mario Draghi. One which may well apply more pressure to the troubled shared currency. A new set of economic projections will be released today, this will be the first place investors will look to determine just how concerned the central bank are about the future.
Written by Viv Savani. 8:26am, June 6th 2019
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