Dollar jumps as jobs shock shakes markets
Friday’s jobs data dominated. Payrolls printed at +172k, well above the ~85k expected, reinforcing the view that the Fed may need to stay stricter for longer. That triggered a sharp pullback in crowded equity trades—especially tech and higher-risk growth names—while the dollar strengthened broadly against both major and emerging currencies.
The upside surprise pushed US yields higher, led by the short end. Two-year yields rose 12bp to 4.16%, while 10-year yields gained 7bp to 4.54%. The spread narrowed toward 37bp as expectations for near-term rate cuts faded.
The US and Iran continue to make little progress toward even a temporary deal to end the conflict that Washington and Israel initiated 100 days ago. Fresh attacks are adding strain to an already fragile ceasefire. The past week marked the sharpest rise in tensions since the truce began around April 8, with talks stalled over frozen Iranian funds and a parallel Israel–Hezbollah conflict in Lebanon.
This week, the US May CPI report could keep pressure on regional currencies. Forecasts suggest core inflation may edge higher year-on-year, while headline inflation is expected to stay in the 4% range.
At Friday’s close, AUD/USD and NZD/USD both down 1.2%, while USD/SGD up 0.47% and USD/CNH down 0.2%.
Fed hawk tone meets USD/SGD near 2-month highs
Cleveland Fed President Hammack said inflation remains elevated and is still rising, which she sees as a bigger concern than the labour market. She noted it makes sense to hold rates steady for now given uncertainty, but added that a move on rates could come soon if needed.
In Asia, USD/SGD trades about 2.6% above its 28 January low of 1.2586.
Near-term support sits at the 21-day EMA at 1.2803, with the 100-day EMA close by at 1.2787.
USD/SGD is hovering near two‑month highs, while EUR/SGD sits near two‑month lows.
Inflation and twin central bank decisions
The week builds toward US inflation on Wednesday, the marquee release, with both headline and core CPI in focus for clues on the Fed’s higher-for-longer stance. Japan’s PPI leads the day and China rounds out the day with PPI and CPI.
The Bank of Canada decides on Wednesday and the ECB follows on Thursday, with its deposit rate eyed. Any shift in tone could ripple across G10 crosses and steer near-term dollar direction.
Japan opens the week Monday with final 1Q GDP, the annualised read eyed at 1.3%, down from 2.1%. China’s May trade figures on Tuesday gauge external demand, while US PPI on Thursday adds colour on the goods-side price cycle.
The week closes with New Zealand manufacturing PMI, Japanese and UK industrial production, and German CPI, offering a read on the growth pulse heading into mid-month positioning.
Antipodeans slip as dollar gains ground
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 8 – 12 June
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*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.
