If the dollar can bounce today, it can soar
Scratch off any hopes for a Fed hike in June. Jobs missed estimates and the only reason the unemployment rate didn't rise is because labor force participation fell.
If there's a silver lining in the cloudy report it's that average hourly earnings rose 2.5% compared to 2.4% expected in a sign that some wage inflation has arrived, or at least it's ticked higher.
The US dollar took the news badly. The kneejerk in USD/JPY was down to 106.50 from 107.00. The general moves are 50 pips across the board but there has been no follow-through yet.
For me, the big test of a trend is how it responds to news . This week has been all about mild optimism for the US dollar bulls. This dashes the fundamental Fed angle but that doesn't mean the dollar can't climb. Seasonally it's a great month for USD and it's been beaten down since early in the year.
If this US dollar can turn around in spite of the jobs data, then I think it's back on the dollar train.
Already as I'm writing this, the commodity currencies have turned lower.
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