Greenback surges after US jobs beat – United States – English

Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist

US jobs report pushes back Fed hopes

The US dollar was strongly higher on Friday after the US non-farm employment report beat expectations.

The May jobs report came in at 272k new jobs – well above the 180k forecast. Average hourly earnings were also higher than expected in another sign of strength for the US jobs markets.

The unemployment rate ticked higher from 3.9% to 4.0%.

Key markets reversed from recent highs. The AUD/USD fell 1.3% as major resistance at 0.6700 continues to cap gains.

The NZD/USD led losses, down 1.4%, with five-month highs at 0.6200 also providing resistance.

In Europe, the EUR/USD and GBP/USD also turned sharply from recent highs.

In Asia, the USD/JPY jumped from near one-month lows and further gains could see the pair near the recent intervention levels at 160.00.

The USD/SGD jumped 0.4% while the USD/CNH was steady near six-month highs at 7.2800.

USD jump sees intervention fears return

Through FX intervention, Japan’s Ministry of Finance is still able to manage the rate of yen depreciation, but it is starting to become clear that this is only a temporary solution.

The Japanese economy has undoubtedly benefited from the cheaper yen, but because the corporate-to-household income channel is still congested, there hasn’t been a significant increase in domestic demand as of yet.

The swift depreciation of the yen has the potential to erode domestic trust in the currency, which might increase the likelihood of more yen weakening due to increased capital flight.

By the end of 2024, we anticipate that the BoJ will have increased policy rates by 50 basis points, quicker than previously indicated.

Fed due this week

FX markets will be driven by central bank decisions this week with policy announcements due from the US Federal Reserve, Bank of Japan, Bank of Thailand, and Central Bank of Taiwan.

The Federal Reserve’s FOMC meeting on Wednesday and Thursday will be closely watched, with the FOMC statement, projections, and press conference on Thursday. These events could significantly impact the USD.

The Bank of Japan’s Monetary Policy Meeting on Thursday and Friday will also be in focus, especially after the second-quarter GDP release on Monday. The outcome of this meeting could influence the JPY.

In other markets, China’s CPI data on Wednesday might affect the CNH.

USD surges after jobs

Table: seven-day rolling currency trends and trading ranges  

Key global risk events

Calendar: 10 – 15 June 

All times AEST

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

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