US dollar firms after upbeat nonfarm payrolls numbers
The US dollar rose slightly against key currencies as investors reacted to the upbeat employment numbers from the United States. The data showed that the economy added more than 4.8 million jobs in May as the economy reopened. That was the second straight month of upbeat job growth after the economy lost more than 20 million jobs in April. The unemployment rate declined from the previous 13.3% to 11.0%. Meanwhile, wages declined by 0.7% while the average number of hours declined to 34.5. The number of initial jobless claims declined from last week’s 1.48 million to 1.42 million. This was the lowest level the number has been since peaking at 6.8 million in March. While these numbers were positive, there are concerns about the rising number of coronavirus cases.
Global stocks rose today as traders reacted to the positive clinical trials of a coronavirus vaccine by Pfizer. In a statement yesterday, the pharmaceutical giant said that initial trials of its vaccine had shown significant progress. This news provides optimism that the vaccine could be accepted in the coming months. Other drugs being manufactured by Gilead, AstraZeneca, Moderna, and Sanofi have also shown some positive signs. Investors are also optimistic about the stimulus. In the United States, the House passed a $1.5 trillion infrastructure package, which will now go to the Senate. In Europe, the DAX index rose by more than 1.80% while the FTSE 100 rose by more than 0.82%.
The Canadian dollar was little changed as traders reacted to the rising crude oil price and the country’s trade numbers. Brent and WTI crude oil price rose by more than 1% after Saudi Arabia threatened a price war between Nigeria and Angola. Meanwhile, Canada’s exports rose from the previous $32.66 billion to $34.6 billion in May. Imports declined from the previous $36.7 billion to $35.2 billion. This is a signal that the economy is improving as the country reopens its borders.
The EUR/GBP pair declined today as data showed that the producer price index (PPI) declined in June. The pair is trading at 0.9021, which is below the 50-day and 100-day exponential moving averages. The RSI has declined sharply to the current level of 36. Also, the price is slightly above the ascending white trendline. Therefore, the pair is likely to continue falling as bears move to test the important psychological level of 0.9000.
The AUD/NZD pair declined to an intraday low of 1.0610. On the four-hour chart, the price has been declining after reaching a high of 1.0876 in June. The price is slightly below the 50-day and 100-day exponential moving averages and is slightly below the 23.6% Fibonacci retracement level. The RSI has moved to the oversold level of 25. Therefore, the pair is likely to continue falling as bears attempt to retest the next support at 1.0577.
The EUR/USD pair erased some gains after the upbeat nonfarm payroll numbers. The pair is trading at 1.1284, down from the previous high of 1.1300. On the four-hour chart, the price is still slightly above the 50-day and 100-day exponential moving averages. The histogram and the mainline of the MACD has continued to rise while the price is above the 23.6% Fibonacci retracement level. The pair may still continue rising as bulls attempt to remain above 1.1300.