Dollar Outweighs Rivals Across the Board but Market Treads Cautiously

Daily Update - 13th June 2019

Yesterday’s Market

•             EUR - Producer Price Index Ex Food & Energy

•             USD - Consumer Price Index.

 

Yesterday’s Explained

U.S. consumer prices barely rose in May, pointing to moderate inflation that together with a slowing economy increased pressure on the Fed to lower interest rates this year.

Dollar index had dropped to 96.459 on Monday, its lowest since late March, following a sharp decline in long-term U.S. Treasury yields, which fell to near two-year lows last week after a soft U.S. jobs report bolstered expectations for an interest rate cut by the Federal Reserve.

 

Today’s Market

•             EUR - Harmonized Index of Consumer Prices

•             USD - Continuing Jobless Claims

•             AUD - Unemployment Rate

 

Today’s Focus

Although USD Continuing Jobless Claims generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy.

After the Reserve Bank of Australia slashed interest rates, it will be interesting to see if the labor market remains in the spotlight and will shape the next rate decision. A more moderate gain in positions is likely in the report for May.