Goldman Sachs

USD: Moderate US job gains should keep Dollar on back foot. The US economy added 559k jobs in May and the U3 unemployment rate edged down to a recovery low of 5.8%. But the latest employment report missed market expectations (which were elevated after the earlier ADP result), and did little to dispel concerns that supply frictions are holding back the labor market recovery. Indeed, the US labor force participation rate declined slightly during the month, and the employment-to-population ratio increased by just one tenth.

We expect that the report will ease market concerns about an earlier-than-expected wind down of the Fed’s asset purchases, even if it does not entirely eliminate the possibility of a September taper announcement. The combination of steady Fed expectations and a broadening global economic recovery should allow recent Dollar weakness continue.

Citi

It’s a steady if muted start to the week, with prices little changed from Friday’s close after NFP. With very little on the calendar today, we'll be waiting for events later in the week. It’s all about Thursday, with US CPI and also the ECB. Overnight, comments from Yellen regarding interest rates should be contextualized, while we note that China trade data saw a slight miss in exports.

While election results are still being counted, PEN is on track for a sizeable rally as Fujimori looks to emerge victorious from the presidential election run off. MXN sees AMLO and his parties with likely enough votes for a simple majority, while we see KRW and INR trading on a better note today.

FX EM and commodity currencies outperformed as commodity prices rose and the NFP report reduced risk of early Fed tightening. Short USD positions have been cut and hawkish Fed risks slightly recede, opening up the way for further USD downside. But this week a likely dovish ECB and potentially high US inflation reading could stand in the way of downside Dollar momentum, even though our overall view remains for a weaker Dollar over time and upside in G10 commodity currencies, EUR and GBP.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.