Forex news for North America trading on June 1, 2021:
- May US ISM manufacturing 61.2 vs 60.9 expected
- Canada March GDP +1.1% m/m vs +1.0% expected
- US construction spending for April 0.2% versus 0.5% estimate
- OPEC+ agrees to stick to output plans
- Fed's Brainard: We are far from goals but seeing progress
- Dallas Fed manufacturing index 34.9 vs 36.3 exp
- Fed's Quarles: I don't think we should use our tools to address supply chain issues
- New Zealand GDT price index -0.9%
- Markit US May final manufacturing 62.1 vs 61.5 expected
- Canada Markit manufacturing PMI 57.0 vs 57.2 prior
Markets:
- Gold down $7 to $1900
- WTI crude oil up $1.63 to $67.95 (highest close since 2018)
- US 10-year yields up 1.5 bps to 1.61%
- S&P 500 down 1 point to 4203
- AUD leads, GBP lags
The US dollar turned around about 3 hours into the New York trading week and erased virtually all of the early losses. The turn came on a broad shift in sentiment towards safety and the dollar bid contrast with falling yields in a sign that flows were the driver.
The ISM manufacturing index got some attention but the price action didn't fit with the numbers. The one worry going forward was a soft employment component with many companies voicing concerns about the difficulty in filling jobs.
EUR/USD made a move to the upside in a 25 pip rally to 1.2250 but couldn't hold the strength and gave it all back after London went home.
Cable was worse as it fell 60 pips as the heavy selling that started in London. That move squashed the pop in thin trading on Monday but it ultimately finished at the lows of the day and below Monday's low. That's a bit of a concern for the day ahead and a spot to watch.
USD/JPY didn't do much as it stuck in a 30 pip range before finishing near the lows.
A tougher move to explain was the loonie. It touched a marginal new extreme dating back to 2015 but couldn't break 1.20 and then the reversal was on and USD/CAD climbed to 1.2072. That's despite oil breaking out to the best levels since 2018.
Another interesting one to note is AUD/USD, which tried to break 0.7770 four times but couldn't break through. Soft commodities were strong and iron ore prices have stormed back.
