Dollar Soars as Jobs Undermine Rate-Cut Chances

USD

The dollar index, which measures the greenback against a basket of major currencies, extended its rally climbing to a two-week high of 97.44 on strong employment figures. The US economy created 224 thousand jobs in June, beating the expectations of 160 thousand. The Unemployment rate ticked higher to 3.7% from 3.6% as the participation rate rose to 62.9% from 62.8% prior. The Average Hourly Earnings rose by 0.2% in June, less than estimates of 0.3%. The economic data were strong enough to boost Treasury yields where the US 10-year yields jumped to a two-week high of 2.07%, taking down the chances of a 50 basis point rate-cut in July meeting on the CME Fed watch tool to 0. The USDJPY surged to a high of 108.65, the EURUSD dipped to $1.1206, and the GBPUSD dropped to $1.2480. Market participants are looking forward to the Federal Reserve Chairman Jerome Powell semi-annual monetary policy testimony, the minutes of the last FOMC meeting, and CPI figures.

Metals

Gold prices dipped on Friday following the release of the US jobs report which undermined the chances of an interest rate cut by 50 basis points in July. The gold billion fell to a low of $1386 as yields surged. However, gold found significant support near the lows and bounced up to a high of 1405 during today's Asian session as yields erased partial gains. The price of a silver ounce is hovering above $15, and palladium held steady above $1560.

Oil

Oil prices settled slightly higher on Friday, trying to recover from the losses incurred following the OPEC+ supply cut extension. The current supply cuts and the geopolitical situation are providing support to prices, while the woes of a global economic slowdown are weighing in. As a result, oil prices hold a tight trading range awaiting fresh fundamental drivers. The West Texas Intermediate crude futures traded at a high of $57.83, and Brent futures rose to $64.44.

Major Economic Events

 
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