The US manufacturing sector saw a loss of impetus, leading to a decrease in the value of the US Dollar and a rise in risk-associated assets. This trend was further supported by upcoming events such as the ECB event and US Nonfarm Payrolls. On June 4, the USD Index (DXY) dropped significantly, approaching three-week lows around the 104.00 level. Factory Orders, JOLTs Job Openings, and the RCM/TIPP Economic Optimism Index were key points of focus for the day.
EUR/USD experienced a third consecutive session of gains, challenging the important 1.0900 level due to overall Dollar weakness. Germany’s labour market report and EMU’s Consumer Inflation Expectations were set to be key factors in the day’s discussion on the domestic front. GBP/USD also made gains, nearing the crucial 1.2800 level and multi-week highs. The BRC Retail Sales Monitor was anticipated to provide further insight on June 4.
In response to a weaker Dollar and decreasing US yields, USD/JPY saw a decline to multi-session lows below 156.00. In Japan, a JGB 10-year Auction was scheduled for June 4. The Australian Dollar was strengthened by the increasing selling pressure on the Greenback, pushing AUD/USD towards the 0.6700 level. Business Inventories, Current Account, and final Retail Sales were expected data releases in Australia on the same day.
WTI prices dropped for the third consecutive week, falling below $77.00 per barrel on Monday following a bearish OPEC+ meeting on Sunday. On the other hand, Gold prices surged to around $2,350 as the Dollar weakened and US yields declined. Silver also reversed three days of losses in response to these market movements.
To summarize, the US manufacturing sector’s loss of momentum had a significant impact on the value of the Dollar and risk-associated assets. The market was closely watching events such as the ECB meeting and US Nonfarm Payrolls. Major currencies like EUR/USD and GBP/USD saw gains, while USD/JPY declined. Commodity prices, including WTI, Gold, and Silver, responded to the shifting market dynamics in various ways. Investors remained cautious as they navigated through the latest developments in the global economy.
