The US dollar remained resilient against its major counterparts early Monday, while US stock index futures traded in negative territory, reflecting wholesale investors’ wariness. Market participants eagerly await comments from Federal Reserve (Fed) officials, including San Francisco Fed President Mary Daly and Cleveland Fed President Loretta Mester, which could provide insights into the Central Bank’s monetary policy outlook.
Mixed US Jobs Report Impacts the Dollar
The US Bureau of Labor Statistics reported that nonfarm payrolls (NFP) in the US rose by 209,000 in June, falling short of the market expectation of 225,000. However, the unemployment rate edged lower to 3.6%, keeping the investors cautious, and the average hourly earnings remained unchanged at 4.4%, surpassing analysts’ estimates. The disappointing NFP figures led to heavy selling pressure on the US dollar, with the US Dollar Index (DXY) dropping to a two-week low of 102.22 on Friday. The DXY has since recovered to around 102.50 in the European morning.
US-China Disagreements and Chinese Inflation Data
US Treasury Secretary Janet Yellen acknowledged significant disagreements between the US and China but described her meetings with senior Chinese officials as “direct” and “productive.” US stock index futures in the European session are down between 0.4% and 0.6%. China’s inflation data release also captured attention, with the annual Consumer Price Index (CPI) remaining unchanged in June and the Producer Price Index (PPI) declining by 5.4% during the same period.
Forex Market Movements and Interest Rate for Investors
The US dollar faced downward pressure on Monday as the weaker-than-expected US jobs data lowered market expectations for further rate hikes by the Federal Reserve. The Japanese yen gained strength, trading at 142.30 per dollar in early Asian trade, following a 1.4% surge on Friday. The euro started the week on a negative note, trading around 1.0950 against the US dollar after reaching 1.1000 in the American session on Friday. Meanwhile, the pound experienced a technical correction, declining toward 1.2800 against the US dollar after touching its highest level since April 2022 at 1.2851.
Gold and Cryptocurrency Market Update
Gold prices gained traction on Friday, managing to erase weekly losses. The XAU/USD pair currently fluctuates above $1,920 within a tight channel early Monday. Despite the mixed labour market data from the US, the benchmark 10-year US Treasury bond yield remains above 4%, limiting further bullish momentum for business investors. In the cryptocurrency market, Bitcoin edged lower over the weekend but maintained its position above $30,000, while Ethereum remained relatively stable at around $1,850 at the start of the week.
