Review of the dollar, euro, pound, yen, aussie and gold prices for July 5, 2021


The European currency has shown a slight decline against the US dollar during the Asian session, returning to the usual “bearish” dynamics after last Friday’s growth. The instrument declined at the end of last week, awaiting the publication of the report on the US labor market for June, but after its release, despite moderate optimism from the data, traders began to massively close short positions in the euro. Anyway, the report reflected an increase in the number of new jobs outside agriculture by 850 thousand in June after rising by 583 thousand in May. Analysts had expected an increase of only 700 thousand. At the same time, the unemployment rate in June unexpectedly rose and reached 5.9%. In turn, the euro received support from the data on manufacturing inflation. Thus, the producer price index of the eurozone in May rose by 1.3% m / m after increasing by 0.9% m / m in April. In annual terms, the indicator accelerated from + 7.6% y / y to + 9.6% y / y.


The British pound is trading with mixed dynamics against the US currency during the morning session, consolidating near 1.3820 after strong growth at the end of last week, when the instrument retreated from its local lows since April 16. The US employment report unexpectedly triggered additional dollar sales as investors seemed to be counting on much stronger employment growth. Obviously, such data will not encourage the US Federal Reserve to begin tightening monetary policy in the near future, and therefore all the conclusions that can be drawn from the publication of the US Department of Labor are somewhat secondary. In addition, the unemployment rate in June showed an unexpected increase from 5.8% to 5.9%, while forecasts assumed it would decrease to 5.7%.


The Aussie declines against the US currency in the morning session, correcting after strong gains at the end of last week, which allowed the instrument to renew local highs since June 29. The reason for the appearance of “bearish” dynamics on Monday is the ambiguous macroeconomic statistics from Australia and China. Thus, the number of building permits issued in Australia in May fell sharply by 7.1% mom after falling by 5.7% mom in April. Analysts expected a 5% m / m contraction. At the same time, the index of business activity in the service sector from the Commonwealth Bank in June rose from 56 to 56.8 points with a neutral forecast. Retail sales also supported sentiment. In May, sales volumes increased by 0.4% MoM after increasing by 0.1% MoM in April. Chinese data were disappointing with a sharp drop in the services PMI from Caixin. In June, the index fell from 55.1 to 50.3 points, while forecasts assumed its growth to 55.7 points.


The US dollar is showing moderate gains against the Japanese yen in Asian trading, recovering from a corrective decline late last week. Market participants reacted to the publication of data on the US labor market for June with active dollar sales, despite the fact that the report can hardly be called negative. Instead of the expected 700 thousand jobs, the US economy created 850 thousand, but this was not enough for investors, since they remained convinced of the neutral monetary policy of the US Federal Reserve. Today, the yen is slightly supported by the manufacturing PMI from Jibun Bank. In June, the indicator rose from 46.5 to 48 points, which turned out to be better than the neutral forecasts of analysts.


Gold prices show flat trading dynamics during the Asian session, consolidating near the local highs, updated last Friday. The instrument was supported at the end of the last trading week by the weak dollar, which did not find any reason to resume growth after the publication of the report on the US labor market for June. Despite the fact that the growth in the number of new jobs outside of agriculture turned out to be better than forecasted, analysts agree that such a dynamics was incorporated into the quotes for a long time, and therefore the data did not have a noticeable effect. In addition, the rather optimistic statistics on employment was marred by the growth in the unemployment rate from 5.8% to 5.9%, while the forecast was to decrease to 5.7%.

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