- USD manages to hold its ground on Tuesday after sharp losses on Monday due to disappointing May ISM PMIs.
- JOLTS for April reported a lower-than-expected job opening.
- Markets await upcoming Nonfarm Payrolls report and wage growth data for further insights into the Fed's policy outlook.
On Tuesday, the US Dollar Index (DXY) saw moderate gains despite soft labor market data reported by the US Bureau of Labor Statistics. The previously bearish market environment, fueled by weak Institute for Supply Management (ISM) PMI data for May, appeared to stabilize. That being said, the market seems to be building concerns around a weakening US economy that might prompt the Federal Reserve (Fed) to cut rates sooner.
Market attention has now shifted to additional labor market data that will include ADP Employment Change figures, Nonfarm Payrolls, Wage inflation, and Unemployment data for May, which will give additional insights into the US economy.
Daily digest market movers: USD holds ground despite soft JOLTS data
- Markets displayed unease with the JOLTS report indicating fewer job openings in April.
- Job openings in April were reported to be 8.059 million, lower than both the expected 8.34 million and March's revised figure of 8.35 million, according to data released on Tuesday by the BLS.
- Falling job openings contributed to the market's wariness, escalating speculation of a Fed interest rate cut in September to nearly 60%.
- Upcoming Nonfarm Payrolls report for May and wage growth data will be crucial in further influencing the Fed's future policy direction.
DXY technical analysis: US Dollar sees short relief despite negative indicators
Despite the slight gains on Tuesday, the DXY outlook continues to be negative. Indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) remain in negative territory, reflecting persistent bearish sentiment and selling pressure.
After falling below the 20,100 and 200-day Simple Moving Averages (SMAs), the overall trend has turned in favor of the sellers.
