Dollar Likely to Return Gains


The U.S. dollar firmed when the stronger than predicted U.S. employment numbers were released.

Factory orders in Germany declined sharply by 10.7% on a monthly basis in March 2023, which is much worse than expectations of a 2.2% drop.

Retail sales in the euro area fell 1.2% month-over-month in March of 2023, following a 0.2% drop in February and much worse than forecasts of a 0.1% decline.

The S&P Global/CIPS U.K. Construction PMI edged higher to 51.1 in April of 2023 from 50.7 in March, compared to forecasts of 51.

Australia’s central bank lowered its forecasts for inflation, wages and broader GDP growth this year. The Reserve Bank of Australia estimated  the mean inflation rate at 6.0% in the year-ended June, which is down from 6.25% seen three months ago, in its quarterly Statement on Monetary Policy.

Most of the morning gains in the U.S. dollar will probably be given back later today.

Longer term, interest rate differentials suggest lower prices for the U.S. dollar and higher prices for the euro currency.


Stock index futures are higher.

Nonfarm payrolls in April were up 253,000 when an increase of 178,000 was expected, and private payrolls increased 230,000, which compares to the anticipated gain of 153,000.

The unemployment rate was 3.4% when 3.6% was predicted and average hourly earnings were up 0.5% when an increase of 0.3% was estimated.

The average workweek declined to 34.4 hours when 34.5 hours were expected.


Futures are lower due to the mostly stronger than anticipated employment numbers.

Federal Reserve speakers today are Lisa Cook at 12:00 and James Bullard at 12:00.

Most likely the FOMC will keeps its fed funds rate unchanged at its June 14 policy meeting.

The technicals and fundamentals remain supportive.


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