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Talking Points:

  • Yen falls, Aussie and NZ Dollars rise markets’ mood improves in Asia
  • US employment now in focus, with leading surveys looking optimistic
  • Firm payrolls data may boost post-June Fed rate hike bets, US Dollar

The anti-risk Japanese Yen fell while the sentiment-sensitive Australian and New Zealand Dollars traded higher alongside stocks in Asian trade. The MSCI Asia Pacificregional equity benchmark added nearly a full percentage point, echoing a surge on Wall Street triggered by a round of supportive US economic data.

From here, a lackluster offering on the European data docket puts the spotlight on the always much-anticipated monthly set of US labor market statistics. The economy is expected to have added 182k jobs last month, a slight slowdown from a 211k gain in March. The jobless is seen holding at 4.4 percent.

Leading survey data hints that a more optimistic outcome may be in store. Most interestingly, the pace of job creation in the service sector – the largest US employer by a long mile – appears to have accelerated in May after hitting a near-seven year low in the prior month.

If this proves telling, a strong outcome may revive speculation about continued Fed rate hikes to follow after this month’s all-but-certain 25 basis point increase. Needless to say, that would bode well for the US Dollar. At this stage, investors see a 50/50 chance of a third increase by year-end.

Retail traders are betting on US Dollar strength. Find out here what this hints about the price trend!

Asia Session

US Dollar May Extend Recovery on Upbeat Payrolls Data

European Session

US Dollar May Extend Recovery on Upbeat Payrolls Data

** All times listed in GMT. See the full DailyFX economic calendar here.

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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