US dollar gains support from higher Treasury yields, strong job growth
Investing.com
Published Jun 05, 2023 13:38
Investing.com - The US dollar experienced a boost in value following a strong jobs report, which led traders to anticipate higher interest rates for an extended period. This caused the currency to strengthen against its main competitors during Asian trading hours. The Australian dollar and yuan also saw improvements due to increased services activity in China, while the Canadian dollar remained firm thanks to surging crude oil prices.
Recent data revealed that US public and private sector payrolls soared by 339,000 positions in May compared with economists' average prediction of just 190,000 new jobs. Consequently, the greenback gained support from increasing Treasury yields along with rising employment figures. However, despite impressive headline job growth numbers for May, wage pressures eased and unemployment levels rose slightly from their previous record lows.
These factors suggest that there may be room for the Federal Reserve (Fed) to pause its rate-hiking campaign at its upcoming mid-June meeting as some officials had previously hinted at doing so last week. Nevertheless, market participants have merely shifted expectations of rate hikes towards July rather than discarding them altogether.
In other developments within currency markets – Australia's national currency managed to recover from initial losses after more evidence emerged surrounding China's ongoing economic recovery amid pandemic challenges; notably through improved purchasing managers' index (PMI) readings within their service sectors during May compared April figures. Additionally, Canada's digital token held steady amidst global commodity fluctuations where crude oil values climbed over one percent upon news regarding Saudi Arabia cutting back production levels significantly throughout recent months - ultimately causing USD values against CAD equivalents to decline slightly.
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Written By: Investing.com
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