Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
US jobs defy downbeat forecasts
The all-important US jobs report came in much stronger than expected overnight helping the US dollar to gain for a second day.
The June non-farm employment report came in at 147k new jobs versus forecasts for 110k jobs. The unemployment rate fell from 4.3% to 4.1%.
The greenback gained on the news with the USD index climbing from three-year lows for the second day. The USD’s biggest gains were against the euro and Japanese yen.
Across APAC, the Aussie and kiwi were only moderately lower with both the AUD/USD and NZD/USD just off the eight-month highs seen earlier in the week.
Similarly, the USD/SGD and USD/CNH climbed from recent lows.
FX markets might be quieter going into the weekend with US markets closed for the Fourth of July holiday tonight.
Aussie trade gap widens, pair tests resistance
Australia’s trade surplus shrank in May, dropping to AUD2.238 billion from a revised AUD4.859 billion in April, according to the Australian Bureau of Statistics.
The outcome surprised many, landing well below the expected AUD5 billion surplus. Exports weakened while imports picked up speed, pushing the balance lower.
AUD/USD is now hovering near the top of its 30-day range.
The next big hurdle remains 0.66, a level we’ve flagged as a key psychological threshold.
Key support lies on 21-day EMA of 0.6518 and 50-day EMA of 0.6468.
Yuan steadies as China’s services slip and exports contract
China’s services sector lost momentum in June as the Caixin Services PMI slipped to 50.6, down from May’s 51.1 and missing the 50.9 forecast.
It was the weakest reading in nine months, weighed down by slower new business growth amid global headwinds.
Export services took a hit, shrinking for the second straight month at the fastest pace since late 2022.
On the bright side, the Composite PMI climbed to 51.3 in June from 49.6, hinting at some improvement despite mixed economic signals.
CNH held steady overnight, as market focus shifted to unfolding developments in the UK.
Key resistance levels for USD/CNH are at the 21-day EMA of 7.1767 and 50-day EMA of 7.2004.
Greenback higher after strong jobs report
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 30 June – 4 July
All times AEST
All times AEST
Have a question? [email protected]
*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.
