The US Dollar holds its ground against its major rivals at the beginning of the new week with the US Dollar Index (DXY) building on Friday’s gains. Nevertheless, US stock index futures trade mixed, reflecting a cautious stance. April Producer Price Index (PPI) and June Sentix Investors Confidence Index data will be featured in the European economic docket ahead of April Factory Orders and May ISM Services PMI releases from the US.

On Friday, the US Bureau of Labor Statistics reported that Nonfarm Payrolls (NFP) in the US rose 339,000 in May, surpassing the market expectation of 190,000 by a wide margin. Further details of the publication revealed that the Unemployment Rate edged higher to 3.7% from 3.4% in April. The DXY regained its traction on the strong NFP reading and retraced a portion of its weekly decline. Early Monday, the index continues to stretch higher and stays in positive territory above 104.00. In the meantime, the benchmark 10-year US Treasury bond yield is already up more than 1% on the day above 3.7%. Nevertheless, the CME Group FedWatch Tool shows that markets are still pricing in a more than 70% possibility that the Fed will leave its policy rate unchanged at the upcoming meeting.

Over the weekend, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman said that Saudi Arabia will make an extra output cut of 1 million barrels per day from July. Moreover, OPEC and its allies (OPEC+) announced in a statement that they have reached a deal to target total output of 40.46 million barrels per day from 2024. Following this development, crude oil prices rise on Monday and the barrel of West Texas Intermediate was last seen rising nearly 2% on the day at $73.20. The commodity sensitive Canadian Dollar stays resilient early Monday and USD/CAD trades flat on the day slightly below 1.3450.

During the Asian trading hours, the data from Japan revealed that the Jibun Bank Services PMI declined to 55.9 in May from 56.3 in April. USD/JPY largely ignored this report and started the new week on a bullish note. At the time of press, the pair was trading in positive territory at around 140.50.

EUR/USD registered big losses on Friday and extended its decline early Monday. The pair was last seen trading below 1.0700.

Despite Friday’s pullback, GBP/USD ended up posting small gains last week. The pair stays on the back foot in the European morning and tests 1.2400.

In the early trading hours of the Asian session on Tuesday, the Reserve Bank of Australia (RBA) will announce its monetary policy decisions. The RBA is expected to leave its key interest rate unchanged at 3.85%. Ahead of this important event, AUD/USD stays in the red at around 0.6600.

Reserve Bank of Australia Preview: AUD/USD ready for another hike?

Gold price fell sharply on Friday and erased all of its weekly gains. XAU/USD stays under modest bearish pressure amid rising US yields and trades below $1,950.

Following an indecisive weekend, Bitcoin continues to move up and down in a tight channel slightly below $27,000. Ethereum failed to make a daily close above $1,900 despite having advanced above that level over the weekend. ETH/USD edges lower early Monday and was last seen losing nearly 1% on the day at $1,870.

The Australian Dollar outperforms its rivals early Tuesday following the Reserve Bank of Australia’s (RBA) unexpected decision to raise the policy rate by 25 basis points to 4.1%. The US Dollar struggles to find demand as markets see a growing possibility of the Federal Reserve (Fed) leaving its key rate unchanged at the next meeting. Retail Sales from the Euro area and the IBD/TIPP Economic Optimism Index from the US will be featured in the economic calendar.

For the second meeting in a row, the RBA went against the market expectation and opted for an increase in its policy rate. In its policy statement, the RBA reiterated that the board remains resolute in its determination to return inflation to target and added that some further tightening of monetary policy may be required. AUD/USD rose sharply during the Asian trading hours and was last seen rising more than 0.5% on the day above 0.6650.

RBA: Some further tightening of monetary policy may be required.

On Monday, the ISM Services PMI report revealed a loss of momentum in the service sector’s growth in May. Additionally, the publication showed a contraction in the sector’s employment alongside a softening of input inflation. In turn, the US Dollar Index (DXY) came under renewed bearish pressure and erased its gains to close the day flat. In the European morning, DXY stays in negative territory slightly below 104.00 and the benchmark 10-year US Treasury bond yield consolidates Monday’s losses at around 3.7%.

EUR/USD stage a late rebound on Monday and closed the day above 1.0700. Early Tuesday, the pair moves up and down in a tight range amid a lack of fresh catalysts. While speaking before the European Parliament in Brussels on Monday, European Central Bank (ECB) President Christine Lagarde reiterated that there was no clear evidence that underlying inflation has peaked.

GBP/USD erased the majority of its daily losses in the American session on Monday. The pair stays flat slightly below 1.2450 in the European session.

Gold price benefited from falling US yields on Monday and registered modest daily gains. Early Tuesday, XAU/USD fluctuate in a narrow channel near $1,960.

USD/JPY broke below 140.00 on Monday and extended its slide toward 139.00 during the Asian trading hours on Tuesday. Bank of Japan Governor Kazuo Ueda said earlier in the day that the Quantitative and Qualitative Monetary Easing (QQE) will continue until they achieve the inflation target.

Bitcoin came under heavy selling pressure and lost more than 5% on Monday. BTC/USD consolidates its losses near $25,800 on Tuesday. Ethereum stays dangerously close to $1,800 in the European morning after having decline 4% on Monday.

Major currency pairs continue to trade in familiar ranges mid-week as investors remain in search of the next significant catalyst. Later in the day, the Bank of Canada (BoC) will announce its interest rate decision and release the policy statement. The US economic docket will feature Goods Trade Balance and Consumer Credit Change data for April.

During the Asian trading hours, the data from China revealed that the trade surplus contracted to $65.81 billion in May from $90.21 billion in April. This reading came in much lower than the market expectation of $92 billion. On a yearly basis, Exports and Imports declined 7.5% and 0.8% respectively. Meanwhile, Australian Bureau of Statistics reported that the real Gross Domestic Product (GDP) grew at an annualized rate of 2.3% in the first quarter, compared to analysts’ estimate of 2.4%. Following Tuesday’s rally that was fuelled by the Reserve Bank of Australia’s (RBA) unexpected to decision to raise its policy rate by 25 basis points, AUD/USD lost its traction early Wednesday and was last seen trading in negative territory slightly above 0.6650.

The US Dollar Index clings to small daily gains above 104.00 and US stock index futures trade flat early. Meanwhile, the benchmark 10-year US Treasury bond yield continues to fluctuate at around 3.7%.

The BoC is widely forecast to leave its policy rate unchanged at 4.5%. USD/CAD trades in a tight channel above 1.3400 early Wednesday. Previewing the BoC event, “we expect the BoC to leave the policy rate at 4.5%, but after stronger-than-expected consumer price inflation and GDP and with the labour data remaining robust, we cannot rule out a surprise interest rate increase,” said economists at ING.

BoC Preview: Forecasts from six major banks, rates unchanged but hawkish bias.

EUR/USD closed in negative territory on Tuesday and continues to trade on the back foot below 1.0700 in the European morning.

GBP/USD struggled to find direction on Tuesday and closed the day little changed near 1.2400 for the second day in a row. Early Wednesday, the pair edges lower but manages to hold slightly above 1.2400.

USD/JPY edges lower toward 139.00 on Wednesday. The data from Japan showed earlier in the day that the Coincident Index improved slightly to 99.4 in April’s flash estimate from 98.8 in March.

Gold price continues to move up and down in a narrow channel above $1,950 as the lack of volatility in the US yields makes it difficult for XAU/USD to gather directional momentum.

Bitcoin gained traction and erased all of its weekly losses by rising nearly 6% on Tuesday. BTC/USD, however, has lost its recovery momentum and retreated below $27,000 early Wednesday. Ethereum rose 4% on Tuesday and came within a touching distance of $1,900 before going into a consolidation phase.

The market action remains choppy in the second half of the week and major currency pairs stay continue to fluctuate in their weekly ranges. Eurostat will release the final revision for the first-quarter Gross Domestic Product (GDP) growth and the weekly Initial Jobless Claims will be featured in the US economic docket on Thursday.

After the Reserve Bank of Australia (RBA), the Bank of Canada (BoC) became the second major central bank this week to surprise markets with a rate hike. The BoC raise its policy rate by 25 basis points to 4.75% after having held it unchanged in the previous two meetings. In its policy statement, the BoC said that concerns have increased that Consumer Price Index (CPI) inflation could get stuck materially above the 2% target. Following this development, USD/CAD fell to its weakest level in a month near 1.3320 before stabilizing near 1.3350 early Thursday.

The BoC’s unexpected hike triggered a rally in global bond yields. The benchmark 10-year US Treasury bond yield rose nearly 4% and settled at around 3.8%. Meanwhile, the CME Group FedWatch Tool’s probability of one more Fed rate hike next week climbed above 30% from 20% earlier in the week. Early Thursday, US stock index futures trade flat and the US Dollar Index stays calm near 104.00.

EUR/USD extended its sideways grind and closed virtually unchanged on Wednesday. The pair stays rengebound at around 1.0700 in the European morning on Thursday.

GBP/USD registered small gains on Wednesday and was last seen trading a few pips above 1.2450.

USD/JPY closed in positive territory on Wednesday but lost its bullish momentum after meeting resistance near 140.00. The data from Japan showed that the real Gross Domestic Product grew at an annualized rate of 2.7% in the first quarter, surpassing the initial estimate of 1.6%.

Pressured by surging bond yields, Gold price turned south and broke below $1,950 on Wednesday. Early Thursday, XAU/USD consolidates its losses but stays below $1,950.

Bitcoin failed to build on Tuesday’s gains and lost more than 3% on Wednesday. In the European session, BTC/USD trades in a tight channel near $26,500. Ethereum reversed its direction and declined toward $1,800 after having met resistance at $1,900 mid-week.

The US Dollar holds steady on the last trading of the way after having suffered large losses against its major rivals on Thursday. There won’t be any high-tier data releases from the Eurozone nor the US ahead of the weekend. In the early American session, Statistics Canada will release the jobs report for May.

Initial Jobless Claims in the US jumped to 261,000 in the week ending June 3 from 233,000, the US Department of Labor reported on Thursday. The benchmark 10-year US Treasury bond yield fell more than 2% after this data and the US Dollar Index (DXY) dropped to its lowest level in two weeks below 103.50, losing 0.75% in the process. Early Friday, the 10-year US yield stays below 3.75% and DXY fluctuates in a narrow channel at around 103.40. Meanwhile, US stock index futures trade in negative territory, pointing to a cautious market stance.

During the Asian trading hours on Friday, the data from China showed that the Consumer Price Index (CPI) declined by 0.2% on a monthly basis in May. This reading failed to trigger a noticeable market reaction. AUD/USD, which extended its weekly rally and gained 150 pips on Thursday, stays relatively calm slightly above 0.6700 early Friday.

Swiss National Bank (SNB) Chairman Thomas Jordan said on Thursday it would not be a good idea to wait for inflation to rise and then have to raise interest rates. These comments provided a boost to the CHF and USD/CHF lost more than 100 pips. Early Friday, the pair trades below 0.9000.

USD/CAD closed the third straight day in negative territory on Thursday and continues to edge lower early Friday. The pair was last seen trading slightly below 1.3350. The Unemployment Rate in Canada is forecast to tick up to 5.1% in May from 5% April.

Canada Unemployment Rate Preview: Canadian Dollar traders to scrutinize jobs report.

EUR/USD benefited from the broad USD weakness on Thursday and rose toward 1.0800 before going into a consolidation phase. In the European morning, the pair moves up and down in a narrow band above 1.0750.

GBP/USD is finding it difficult to build on Thursday’s gains and holds steady at around 1.2550.

USD/JPY fell to a fresh weekly low below 139.00 on Thursday but regained its traction early Friday. As of writing, the pair was up 0.4% on the day at 139.50.

Gold price rose sharply toward $1,970 on Thursday, boosted by the retreating US T-bond yields. XAU/USD moves sideways near mid-$1,960s in the European morning.

Bitcoin continues to move sideways near $26,500 for the second straight day on Friday. Similarly, Ethereum remains rangeboud slightly above $1,800.

Major currency pairs fluctuate in narrow ranges at the beginning of the week as investors gear up for this week’s key macroeconomic events. There will not be any high-impact data releases featured in the US economic docket on Monday. On Tuesday, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) data for May ahead of the Federal Reserve and the European Central Bank’s (ECB) policy announcements on Wednesday and Thursday, respectively.

US stock index futures trade modestly higher in the European morning and the benchmark 10-year US Treasury bond yield holds steady near 3.75%, reflecting a neutral risk mood. The US Dollar Index, which gauges the US Dollar‘s (USD) performance against a basket of six major currencies, moves sideways at around mid-103.00s.

EUR/USD lost its traction on Friday and erased a large portion of the gains it recorded on Thursday. Nevertheless, the pair snapped a five-week losing streak. Early Monday, EUR/USD stays calm near 1.0750.

GBP/USD gained more than 100 pips last week. In the European morning, the pair clings to small daily gains while holding comfortably above 1.2550. On Tuesday, the UK’s Office for National Statistics will release the jobs report.

USD/JPY edges higher early Monday but stays below 140.00. On Friday, the Bank of Japan (BoJ) will unveil monetary policy decisions. “It’s still too early to call that this inflation has been sustainable and stable,” Bank of Japan (BoJ) policymaker Masazumi Wakatabe told Bloomberg earlier in the day.

Gold price corrected lower on Friday but closed the week in positive territory. XAU/USD moves up and down in a tight channel around $1,960 in the European session.

USD/CAD recovered modestly following the disappointing jobs report on Friday but failed to gather further bullish momentum. The pair stays on the back foot below 1.3350 on Monday.

Bitcoin continued to edge lower over the weekend and ended up losing more than 4% last week. BTC/USD inches lower early Monday and stays below $26,000. Ethereum suffered heavy losses on Sunday and closed the week below $1,800. ETH/USD remains under modest bearish early Monday and trades near $1,750.

The risk-averse market environment helps the US dollar (USD) hold its ground mid-week as investors await FOMC Chairman Jerome Powell’s testimony before the House Financial Services Committee. The economic calendar will not be offering any high-impact macroeconomic data releases and comments from central bank officials will be looked upon for fresh catalysts.

Reflecting the sour market mood, Shanghai Composite and Hang Seng indexes both lost more than 1% on Wednesday. Additionally, US stock index futures trade in negative territory following the dismal performance of major equity indexes on Tuesday. The US Dollar Index (DXY) clings to small daily gains above 102.50 after having closed the previous three trading days in the green.

Hot inflation data from the UK helped Pound Sterling find demand in the early European morning on Wednesday. Annual inflation, as measured by the change in the Consumer price Index (CPI), held steady at 8.7% in May, surpassing the market expectation of 8.4%. The Core CPI, which excludes volatile food and energy prices, rose 7.1% in the same period, compared to analysts’ estimate of 6.8%. On an encouraging note, the Producer Price Index declined on a monthly basis. Following an initial spike above 1.2800, GBP/USD edged lower and stabilized above 1.2750.

EUR/USD continues to fluctuate in a very tight channel above 1.0900 for the second straight day on Wednesday. European Central Bank (ECB) policymakers Joachim Nagel, Isabelle Schnabel and Fabio Panetta will be speaking later in the day.

Following Tuesday’s slide, USD/JPY gathered bullish momentum and was last seen trading above 142.00. “The Bank of Japan (BoJ) will patiently maintain an easy monetary policy to stably and sustainably achieve the 2% price target accompanied by wage growth,” the central bank Governor Kazuo Ueda repeated on Wednesday.

USD/CAD moves up and down in a narrow band above 1.3200. Statistics Canada will release Retail Sales data for April later in the session.

AUD/USD stays under bearish pressure and trades in negative territory below 0.6800 on Wednesday.

Gold price suffered large losses on Tuesday as investors reacted to the potential negative impact of a slowdown in China to the yellow metal’s demand outlook. XAU/USD stays relatively quiet below $1,940 early Wednesday.

Bitcoin gathered bullish momentum and advanced to its strongest level since the first week of May above $28,800. Ethereum gained more than 3% on Tuesday and extended its rally to beyond $1,800 early Wednesday.

The US Dollar (USD) continues to benefit from risk aversion and gathers strength early Friday, with the US Dollar Index extending Thursday’s rebound toward 103.00. S&P Global will release the preliminary June Manufacturing and Services PMI surveys for Germany, the Eurozone, the UK and the US. Investors will also pay close attention to comments from central bank officials.

On Thursday, the Bank of England (BoE) surprised markets with a 50 basis points (bps) rate increase. The BoE reiterated in its policy statement that further tightening in the monetary policy will be required if price pressures proved to be more persistent. Although GBP/USD spiked above 1.2800 with the immediate reaction, it reversed its direction and closed the day in negative territory amid broad USD strength. In the European morning on Friday, the pair continues to edge lower toward 1.2700.

Similarly, the Swiss National Bank hiked its policy rate by 25 bps to 1.75%. In the post-meeting press conference, SNB Chairman Thomas Jordan said that they cannot rule out additional policy tightening. Following a short-lasting drop toward 0.8900, USD/CHF staged a rebound and registered small daily gain on Thursday. The pair preserves its recovery momentum and rises toward 0.9000 on Friday.

Reflecting the risk-averse market atmosphere, US stock index futures are down between 0.4% and 0.5% in the European morning. Meanwhile, the benchmark 10-year US Treasury bond yield consolidates weekly gains slightly below 3.8%. On the second day of his congressional testimony, FOMC Chairman Jerome Powell noted that it will be appropriate to raise rates one or two more times this year and added that they are not seeing any rate cuts anytime soon.

EUR/USD failed to stabilize above 1.1000 on Thursday and fell to the 1.0950 area during the American trading hours. The pair stays on the back foot and retreats toward 1.0900 in the early European session.

USD/JPY gained more than 100 pips on Thursday and advanced to its highest level since November near 143.50 during the Asian trading hours on Friday.

Pressured by rising US Treasury bond yields, Gold price suffered large losses and closed the fifth straight trading day in negative territory on Thursday. XAU/USD touched a three-month low at $1,910 early Friday before recovering modestly in the European morning.

Following Wednesday’s impressive rally, Bitcoin fluctuated in a tight channel above $30,000 on Thursday. BTC/USD holds steady near that level on Friday. Ethereum lost 1% on Thursday and closed slightly below $1,900. ETH/USD continues to move sideways in the European morning.