Forex Major Currencies Outlook (June 03, 2016)

Economic data from the US came in better than consensus, as the initial jobless claims landed at 267K versus the projected 270K figure. The US NFP report is due today and a 159K increase in hiring is eyed, lower than the earlier 160K rise. Average hourly earnings could post a 0.2% uptick but a weaker reading could be bearish for the dollar. 

EUR

The euro lost ground after the ECB decision even though the central bank did not take policy action. Policymakers upgraded their growth forecast for the year from 1.4% to 1.6% and the HICP from 0.1% to 0.2% but Draghi noted that Q2 growth could be slower than Q1 and that inflation could remain low for the coming months. Final services PMI readings are due from the top euro zone economies today. 

GBP

The pound regained a bit of ground against its peers despite weaker than expected UK construction PMI. The index fell from 52.0 to 51.2, lower than the estimated 51.9 reading. For today, the services PMI is due and a rise from 52.3 to 52.5 is eyed, although traders could still focus on Brexit updates. 

CHF

The franc was stuck in consolidation since there were no reports out of Switzerland yesterday. There are still no major reports lined up from the Swiss economy today so the franc could keep moving sideways or take its cue from market sentiment. 

JPY

The yen raked in more gains after Prime Minister Abe recently confirmed the sales tax hike delay. Average cash earnings in Japan rose 0.3%, lower than the estimated 0.9% gain. No other reports are due from Japan today, keeping the yen sensitive to market sentiment. 

Commodity Currencies (AUD, NZD, CAD)

The Aussie and the Loonie were mostly weaker while the Kiwi was able to hold on to its gains. The OPEC failed to come up with an agreement to cap production levels but the meeting seemed relatively positive, as the nations committed to work together in stabilizing the market. No other reports are up for release from the comdoll economies for the rest of the week. 

By Kate Curtis from Trader's Way