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On Thursday, Wall Street indexes rose sharply, boosted by easing expectations of a hawkish Federal Reserve ahead. A sharp increase in US Initial Jobless Claims pushed the US Dollar further to the downside. The Greenback ended the day looking vulnerable to more losses.
US Treasury yields pulled back, paring Wednesday’s advance. The 10-year settled at 3.71%, and the 2-year at 4.50%. European yields also pulled back. The Japanese Yen and metals benefited from the move. Gold prices surged from $1,940 to $1,970, and Silver jumped 3.50%, breaking above $24.00 1.
Economic Data
In the week ending June 3, there were 261,000 initial claims for unemployment benefits in the United States (US), an increase of 28,000 from the previous week’s 233,000, the US Department of Labor reported on Thursday. This reading surpassed the market expectation of 235,000 by a wide margin and caused the USD to come under renewed selling pressure in the early American session.
China released the Consumer Price Index for May, which rose 0.3% from a year ago; the Producer Price Index deepened into negative territory at -4.3%. These numbers were watched closely amid increasing pressure on Chinese officials for some stimulus and rate cuts 2.
Eurozone GDP was revised down from 0.1% QoQ to -0.1%. The number did not alter European Central Bank expectations for next week. EUR/USD posted the highest daily close in almost a month around 1.0780, and above the 20-day Simple Moving Average. The pair gained more than 80 pips 2.
The Chinese inflation data was the highlight of the Asian session. Later in the day, Canada released its employment report. Markets cheered weak employment US data that triggered a sharp decline of the US Dollar on Thursday. Investors are getting ready for next week’s critical events that include US CPI and Fed and ECB meetings.
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