Market Drivers; US Session, June 6

Caution prevailed among investors ahead of the US labor market report release, resulting in subdued price movements across the market on Thursday. Simultaneously, the European Central Bank (ECB) implemented a widely expected 25 basis point reduction in interest rates.

Currencies:

EUR/USD regained traction and approached the 1.0900 zone after the cautious cut from the ECB at its event on Thursday. Germany’s Balance of Trade results are due on June 7 along with another estimate of Q1 GDP Growth Rate in the broader Euroland and a speech by the ECB’s Lagarde.

GBP/USD added to Wednesday’s uptick and traded at shouting distance from the key 1.2800 hurdle. June 7 will only see the release of the Halifax House Price Index.

USD/JPY partially faded Wednesday’s firm performance on the back of the weaker dollar and pale US yields. Household Spending, the preliminary Coincident Index and the Leading Economic Index will be unveiled on June 7.

AUD/USD regained its smile and left behind two straight sessions of losses, retesting two-day highs near 0.6680. The Australian docket will be empty on June 7.

Commodities

Buoyed by growing optimism among traders, WTI crude oil prices surged to three-day highs, approaching the $76.00 per barrel mark. This rally was fueled by the European Central Bank’s rate cut and positive statements from OPEC+ officials, who hinted at potential modifications to their existing agreement.

Meanwhile, gold prices reached a two-week peak near $2,380 per troy ounce due to a weaker dollar, minor fluctuations in US yields, and expectations of earlier-than-expected rate cuts by the Federal Reserve. Additionally, silver continued its upward trajectory, surpassing the $31.00 per ounce threshold.”12

What to watch?

Looking ahead to Friday, the USD Index (DXY) remained defensive near the 104.00 level, with the focus squarely on key US data. Specifically, the Nonfarm Payrolls report and the Unemployment Rate will take center stage in discussions on June 7, closely followed by Wholesale Inventories.

Also Read:
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