Market Drivers; US Session

US Dollar Strength, Jobs Data, and Fed Speakers in Focus

The US dollar (USD) began the week with renewed strength, driven by market reactions to recently implemented US tariffs on Canada, Mexico, and China. This week’s economic calendar features key US labor market data releases and public appearances by Federal Reserve (the Fed) officials, which are likely to influence the dollar’s trajectory.

Dollar’s Ascent and Data Highlights

The US Dollar Index (DXY) approached the 110.00 level as investors digested the implications of the new tariffs. US Treasury yields exhibited a mixed pattern. This week’s data releases include the Job Openings and Labor Turnover Survey (JOLTS) job openings report, factory orders data, and the American Petroleum Institute’s (API) weekly crude oil inventory report. Additionally, Fed officials Musalem and Daly are scheduled to deliver speeches.

Currency Pair Movements

The euro (EUR) weakened significantly against the dollar, falling towards the 1.0200 level. Upcoming data releases for the Eurozone include the final HCOB Services PMIs for Germany and the broader Eurozone, producer price data, and a speech by European Central Bank (ECB) member Lane.

The British pound (GBP) rebounded from lows near 1.2250 against the dollar, recovering to around the 1.2400 level. The final S&P Global Services PMI for the UK will be released later in the week.

The US dollar weakened against the Japanese yen (JPY) despite its overall strength, influenced by mixed US yields and rising Japanese government bond yields. Japan’s economic calendar includes the final Jibun Bank Services PMI and average cash earnings data.

The Australian dollar (AUD) fell to multi-year lows against the US dollar, pressured by the stronger greenback, US tariffs, and weakness in the Chinese yuan. The final Judo Bank Services PMI for Australia is also due.

Commodities Market Update

West Texas Intermediate (WTI) crude oil prices approached multi-week lows near $72 per barrel, influenced by the stronger dollar and US tariffs.

Gold prices surged to record highs around $2,830 per troy ounce, driven by increased safe-haven demand amid concerns about a potential global trade war. Silver prices also rose sharply, recovering from previous declines and trading above $31 per ounce.

Also Read:

Gold’s Ascent: Navigating Tariffs and Economic Indicators
Canadian Dollar’s Plunge As A Result of Trade War’s Toll
Trade Tensions and the Yen: Navigating Uncertainty
Walking the Line: Inflation, Growth, and the Fed
Fed Official Signals Potential Pause as Uncertainty Lingers
Tariff Pause Offers Brief Respite for Oil Markets
Global Markets Shaken by Tariff Threats: A New Era of Uncertainty?
US Manufacturing PMI Surpasses Expectations, Dollar Reacts