US Dollar Broadly Higher, Supported by Strong Employment Data

Market Reviews

The euro is trading without a single momentum against the US dollar, influenced by weak data on business activity in the manufacturing sector of Germany and the Eurozone, as well as news of the resignation of the Spanish Prime Minister Mariano Rajoy. It is reported, that Spain’s Prime Minister Mariano Rajoy was vote out of office today and Pedro Sánchez will take over.

Eurozone manufacturing PMI fell to a 15-month low of 55.5 in May from April's 56.2. German manufacturing PMI fell to 56.9 in May from 58.1 in April. France PMI manufacturing was revised down by 0.7 to 54.4. Italy PMI manufacturing declined to 52.7 in May, from 53.5 in April. Swiss PMI manufacturing fell to 62.4 in May, from 63.6.

The British pound rose against the US dollar, gaining support from strong data on the PMI manufacturing. Activity in the UK manufacturing sector unexpectedly accelerated last month. UK Manufacturing purchasing managers’ index rose to 54.4 in May, compared to forecasts for a reading of 53.5. The prior month’s reading was 53.9.

The US dollar remains strong, boosted by non-farm payroll (NFP) report. According to today’s data, the US job market grew 223k in May, above expectation of 190k. Unemployment rate fell to 3.8%, beat expectation of 3.9%. That’s also the lowest level in 18 years. Average hourly earnings grew by 0.3% mom, exceeded the forecast of 0.2% mom.

China Caixin manufacturing PMI was unchanged at 51.1 in May, below the forecast of 51.2. Japan PMI manufacturing was finalized at 52.8, revised up from 52.5. Japan capital spending increased by 3.4% in Q1. New Zealand terms of trade fell by 1.90% qoq in Q1. Australia PMI manufacturing declined to 57.4 in May, down from 58.3.