Dollar Holds Steady ahead of Jobs Report

USD

The dollar index which measures the greenback against a basket of major currencies continued to hover near the 100-day exponential moving average at 97.10 ahead of the US jobs report. DXY came under pressure lately amid growing expectations that the Federal Reserve will be forced to ease the monetary policy as the risks to the economic outlook ascended. Market participants await the jobs report to grasp hints about the performance of the US labor market, especially after the disappointing ADP Employment reading on Wednesday. Analysts expect that the US economy created at least 185 thousand jobs in May, with the unemployment rate holding at 3.6%, and the average hourly earnings rising by 0.3%. A soft jobs report could raise further the chance of an interest rate cut in July, which currently sits at 55.8%. The US 10-year yields held at 2.12% and the USDJPY traded near 108.50 awaiting fresh fundamental drivers.

EUR

The euro finished a choppy trading day on a stronger note against the United States dollar. The European Central Bank left the key interest rates unchanged as widely expected while believing that rates will hold their low level through at least first half of 2020. The bank raised GDP forecast for 2019 to 2.1% from 2.0%, while 2020 and 2021 were downgraded to 1.4% from 1.6% and 1.5%, respectively. Also, inflation projection for 2019 was raised by 0.1% to 1.3%, the 2020 fell 0.1% to 1.4%, and the 2021 remained at 1.6%. The European Central Bank President Mario Draghi said that the global headwinds continue to weigh on the economy, however, the ECB is determined to act in case of adverse contingencies. The market was expecting a more dovish tone from the ECB, as a result meeting outcome pushed to EURUSD higher towards $1.1307.

Metals

Gold prices traded lower as the US treasury yields were seen bouncing-off the lows ahead of the US jobs report. The price of a gold ounce fell from a high of $1340 to trade lower at $1330, the silver ounce hovered near $14.90, and palladium held steady near $1355.

Oil

Oil prices surged following the news that the US could delay tariffs on Mexico. Washington could delay imposing tariffs on Mexican products as the talks continue. Moreover, the chances of an extension for the supply cuts by OPEC+ increased as prices lost almost 24% from April's peak. The West Texas Intermediate crude futures rose to a high of $53.66, and the Brent futures climbed to $62.96.

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