Dollar Advances Ahead of US Jobs Market Data
08 July 2022
Another day, another high in the US dollar index as it rose toward the 108 level. As a result, EURUSD dropped below 1.01, cable fell below 1.20, and commodity-linked currencies erased yesterday's gains.
Due to the continued US dollar strength, commodities remain under severe selling pressure. Silver fell to 19 USD, and gold dropped to 1,735 USD, with copper plunging another 3% today.
In light of the next meeting of the European Central Bank, where interest rates are anticipated to increase, Christine Lagarde, the president of the institution, will make a speech later in the session on the threats to the global economy. She must be delighted with the ECB policy, considering the EURUSD pair is about to break parity for the first time in 20 years.
Additionally, the most focus will be on today's US labor market data update as the Labor Department's nonfarm payrolls data will be released. Market players anticipate 265,000 new jobs in June, a decrease from the 390,000 jobs gained in May.
Nonfarm payrolls were 151.7 million as of May, just 0.5% below the pre-pandemic high of 152.5 million in February 2020. The unemployment rate, meanwhile, is anticipated to have remained constant in June at 3.6%, a level it has maintained for three months in a row.
Global equity markets rallied for two days as this week's FOMC minutes failed to bring any hawkish surprise, and bond yields fell dramatically. Nevertheless, the medium-term remains bearish, and any relief rallies are expected to be sold.