Yesterday saw a more than 5% decline in the value of the dollar, the longest losing run since May 3, 2023. The U.S. manufacturing figures and remarks by Federal Reserve officials increased predictions that the Federal Reserve will probably forego raising interest rates at its upcoming meeting, which led to a decline in the value of the dollar.
After European Central Bank (ECB) President Christine Lagarde warned that additional policy tightening was necessary, the euro bounced back from a two-month low on Thursday.
The dollar index settled at 103.5630, off a two-month high of 104.6990 touched on Wednesday as investors trimmed bets the Fed will raise interest rates this month.
From the economic front, U.S. private payrolls increased by 278,000 jobs last month, according to ADP, more than expected.
As new orders continued to decline amid increasing borrowing rates, U.S. manufacturing shrank for a seventh consecutive month in May, falling to 46.9 from 47.1 in April. However, factories increased employment to a nine-month high.
Bullions had a neutral trade yesterday ahead of nonfarm payrolls data for more cues on the U.S. economy. Gold prices settled at 60234 up by 0.06%. Silver gained nearly 0.68 and settled at 72594.
Base metals traded slightly positively. Copper prices settled at 715.90, up by 0.93, and Zinc prices up by 0.53% and settled at 207.20. Aluminium prices were able to gain 0.41% and settled at 208.50.
As markets assessed the potential of price-supportive OPEC+ production cuts over the weekend amid favourable mood regarding U.S. monetary policy and Washington’s debt ceiling deal, crude oil prices paused their recent decline and rebounded more than 2%.
Brent crude futures rose by 3% to $74.25. U.S. West Texas Intermediate crude was at $70.11 a barrel, up 3.80%. MCX crude oil was up 2.43% and settled at 5828.
Economic data and events to watch
Eurozone
At 12.15 am- French Industrial Production m/m is to be released. Data is foreseen at 0.3%, higher than -1.1% previously.
At 12.30 pm – Spanish Unemployment Change, data has foreseen a contraction of 40.1K compared to a contraction of 73.9 K.
Both the above data could have a positive impact on the Euro.
U.S.
At 6.00 pm – Average Hourly Earnings m/m, data is foreseen at 0.3%, lower than the previous 0.5%.
At 6.00 pm – Non-Farm Employment Change. Data is foreseen at 193K, lower than the previous reading of 253K.
At 6.00 pm – Unemployment Rate. Data is foreseen at 3.5%, slightly higher than 3.4% previously. All the above numbers will have a significant impact on the entire market