Poor Jobs Data Sinks Dollar; EUR Reaches 7-Month High

 

USD

The U.S. dollar held flat ranges overnight as the fallout from yesterday’s news was digested by markets. Yesterday afternoon President Trump announced that the United States would exit the Paris Climate Accord. While the decision was met with widespread condemnation from world leaders and high-profile business executives, the President made the argument that the leaving the accord would benefit U.S. businesses. Equity markets have yet to take notice. And while many currency analysts around the globe slammed the decision, fx traders shrugged off the news and focused their attention to today’s data releases.

The greenback is losing across the board in early trading following a dismal jobs report. The U.S. economy only added 138K jobs in the month of May, missing expectation of 182K rise. In addition, March and April’s readings were downwardly revised by a total of 66K jobs.

Despite the poor data, current Fed Futures show that odds the Federal Reserve will raise interest rates later this month has stayed constant at around 90%.

 

EUR 

After trading in sideways ranges overnight, the Euro jumped to a 7-month high against the U.S. dollar following poor U.S. jobs data. There was little data released today in the Eurozone so EUR/USD will trade with U.S. headlines.

The European Central Bank will dominate next week. The central bank will make their interest rate decision next week. While no policy change is expected, analysts will pour over Mario Draghi’s statement for clues as to whether the Bank is gearing up towards lessening their easing.

 

GBP 

The British pound has taken advantage of a generally weak dollar this morning, rising as much as 50 basis points before ceding some of those gains. Attention will shift back to next week’s snap parliamentary elections in the U.K. While Theresa May and her Conservative party are expected to hold onto a majority, traders are not willing to evacuate the chances of a surprise victory by the Labour party as polls have tightened in recent days.