Market expectations of a probable US interest rate hike in June were reinforced by today’s blockbuster U.S jobs report which illustrated steady growth in the US labour market.
The US economy created 223,000k jobs in May while the unemployment rate unexpectedly dropped to its lowest level in 18 years to 3.8% from 3.9% in April. With average hourly earnings exceeding estimates by rising 2.7% YoY, speculation may heighten over the Fed adopting a more aggressive approach towards monetary policy normalization this year. Interestingly Dollar bulls were unimpressed by today’s solid US jobs report with the Dollar Index trading around 94.15 as of writing.
Focusing on the technical picture, the Dollar Index remains bullish on the daily charts as there have been consistently higher highs and higher lows. An intraday breakout above 94.35 could encourage an inline higher towards 94.50 and 95.00, respectively. Alternatively, a failure for prices to keep above 94.00 could result in a decline towards 93.40.
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