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    Asian Session – Dollar stabilizes after NFP dip; pound slides on Brexit fears

    The US dollar stabilized in Asian trading on Monday following the sharp falls on Friday after the disappointing jobs data. Markets were shocked last week when US non-farm payrolls for May missed estimates by a large margin to grow by the slowest pace since 2010. The dollar fell to a one-month low of 106.36 against the yen, while the euro hit a three-week high of 1.1373 dollars. The greenback managed to come off its lows in late Asian session today and was last trading around 107 yen and 1.1140 per euro.

    Attention will now move to Fed Chair Janet Yellen’s speech later today for any signs as to whether the Fed will raise rates in June. In the meantime, other Fed policymakers maintained their stance for the need for gradual rate hikes. Speaking on Saturday, Cleveland Fed President Loretta Mester said that “a gradual upward pace of the funds rate is appropriate” though she added that the timing is “data-dependent”. Boston Fed President Eric Rosengren was a bit more dovish at a speech in Finland. Rosengren said that recent data has been “choppy” but that the Fed is getting closer to reaching the conditions for a rate hike.

    Against a basket of currencies, the dollar was firmer by 0.2% in Asian trading as the Australian and New Zealand dollars fell on profit taking, while the pound was hurt by more Brexit polls. The aussie pulled away from last week’s 3½-week highs to ease to 0.7332 against the US dollar today and the New Zealand dollar was down from Friday’s 5-week highs at 0.6920. Further weighing on the aussie today were weak private-sector inflation data from the Melbourne Institute that showed annual CPI falling to 1% in May.

    Sterling reversed Friday’s sharp gains to slip below 1.44 dollars on Monday as new polls over the weekend pointed to Brexit campaigners gaining a lead over those wanting the UK to remain in the EU. The pound was last trading at 1.4389 dollars, down sharply from Friday’s peak of 1.4581 dollars.

    The euro was little moved against the dollar and the pound after disappointing German factory orders, which fell by 2% month-on-month in April. Forecasts were for factory orders to drop by 0.5%. However, the single currency rose against the yen to climb to 121.78 in late Asian session.

    In commodities, crude oil prices held around $50 a barrel despite the dollar volatility but gold saw sharper moves. Gold prices hit a two-week high of $1248.60 an ounce earlier today as the fading prospects of a June rate hike made the yellow metal more attractive. However, it eased to around $1240 in late Asian trading as the dollar firmed slightly.

    The rest of the day is looking relatively quiet with Janet Yellen’s speech at 16:30 GMT being the highlight of the day.

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