The U.S. weekly jobless claims, which rose more than expected in the latest week, put pressure on the greenback yesterday. The market was generally viewed as consolidating ahead of key inflation data and the Federal Reserve’s interest rate decision next week.
The Labour Department said on Thursday that the number of initial claims for state unemployment benefits increased by 28,000 to a seasonally adjusted 261,000 for the week ending June 3. 235,000 claims were anticipated by economists surveyed by Reuters for the most recent week.
The dollar index, which tracks against a basket of six other currencies, dropped by 0.76% and settled at 103.3160.
Bullions have shown a sharp pullback after the release of higher-than-expected US weekly jobless claims data. Gold prices rebounded from the day’s lows of 59425 and settled at 59891, up by 0.65%. Silver rebounded from the day’s low of 71790 and settled at 73670, up 2.71%.
Copper prices rebounded from the day’s low of 717.70, in anticipation that the Chinese government will roll out stimulus measures to support weak momentum in the country’s industrial sector, as data from May showed that Chinese copper imports fell by 4.6% year-on-year. Copper Future settled at 725.00, up 0.55%.
Crude oil fell drastically as demand weakness and a report the U.S. and Iran may be approaching a deal on oil exports outweighed expectations of tighter Saudi supply and a potential pause to U.S. interest rate hikes.
Oil prices dropped after a news report quoting sources claimed that Iran and the U.S. were close to a short-term agreement that would temporarily lift some sanctions in exchange for Iran limiting its nuclear enrichment.
Brent crude fell by 1.65% to $75.47. U.S. West Texas Intermediate crude was at $70.90 a barrel, down 2.10%. MCX crude futures were down by 1.68%% and settled at 5903.
Economic data and events to watch
China
At 7.00 am – CPI y/y will be released. Data is foreseen at 0.2%, higher than the previous 0.1%.
At the same time – PPI y/y. The forecast is to have a contraction of 4.3% against a contraction of 3.6%.
9th-15th June – New Loans. Data is foreseen at 1530B, higher than the previous 719B.
9th – 15th June – M2 Money Supply y/y. Data is foreseen at 12.0%, lower than the previous 12.4%.
Eurozone
At 1.30 am- Italian Industrial Production m/m is to be released. Data is foreseen at 0.2%, against a contraction of 0.6%.
Both the above data could have a neutral impact on the Euro.
Canada
At 6.00 pm – Employment Change is to be released with a forecast to decrease by 21.2k from the previous week 41.4k.
At 6.00 pm – Unemployment Rate, data is foreseen at 5.1% slightly higher than 5.0%.
At 6.00 pm- The capacity Utilization Rate, forecast is to increase by 82.0% from previous 81.7%
All the above numbers will have a positive impact on the dollar.