The greenback heads into the NFP release, which is likely to show a loss of another 8 million positions in May, trending lower against most of its major rivals, except for those considered safe-havens. Optimistic data is expected to weigh on the dollar and fuel rallies on commodity currencies, FXStreet’s Chief Analyst Valeria Bednarik reports.
Key quotes
“The US is expected to have lost 8 million jobs in May, much better than the 20.5 million shredded in April. That would mean that roughly 30 million people lost their jobs amid COVID-19. The unemployment rate, however, is expected at 19.7% from 14.7%.”
“There are no signs of a pick-up in employment in the near term, and speculative interest knows it. The most it can do is keep on betting on a soon-to-come recovery, despite increased fears over a potential second wave in the country as a result of the civil unrest seen these days.”
“Upbeat US data lately has triggered Wall Street rallies in detriment of the dollar, and there’s no reason to believe that a better-than-expected US employment report could trigger a different reaction. Disappointing numbers could have the opposite effect, although to a lesser extent and hardly mean a dollar’s comeback.”
“Commodity-linked currencies have the most chances of rallying, should the data impress to the upside, while gold prices will likely extend their declines to fresh weekly lows. The Sterling, on the other hand, should be the most reluctant to post a direct reaction to the report.”
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