The Economy of the United States, and Common Currency

After suffering record losses in the prior month, the United States economy unexpectedly gained jobs in May. That is what some data from Friday showed.

Moreover, last month, the jobless rate fell to 13.3% from a post-World War Two high of 14.7% in April. Thus, this offers hope that the largest economy will start stabilizing after the pandemic triggered a wave of job cuts.

The Federal Reserve meeting ends on Wednesday. Thus, before this end, in anticipation of seeing how Chairman Jerome Powell views a recent rise in 10-year Treasury yields and a steepening in the yield curve, some investors might avoid making big trades.

China is the world’s second-largest economy. On Sunday, some data showed that exports from China fell less in May than the market expected. Therefore, the onshore yuan came into focus following this.

The United States Economy

Late last year, the pandemic first emerged in China. It has caused a sharp contraction in global economic activity. Nevertheless, many traders, in the second half of this year, are now focused on the pace of recovery.

Some analysts say that there are many risks to the outlook. Hazards include diplomatic tension between China and the United States, and the United States presidential election later this year.

The net short United States dollar positioning decreased to $8.17 billion in the week ending on June 2, from the $8.6 of the previous week. This United States Commodity Futures Trading Commission data was released on Friday. This data might discourage some investors from selling the dollar any further.

Last week, the European Central Bank said that it would increase bond purchases. They intend it to help the weakened economies in the bloc. As a result, the common currency continued to ride a wave of optimism. Thus, the euro rose to $1.1314.

Later, on Monday, sentiment may face some challenges. The data is expected to show that German industrial output fell by its most on record in April.