Dollar takes a Hit on Good Economic Data

The U.S. dollar fell against the New Zealand and Australian dollars as well against the British pound. This comes after a shocking and unbelievable improvement in the U.S. labor market for the month of May.

As sentiment improved in the financial markets, the demand for safe haven assets, like the dollar, dwindled.

Both the New Zealand and Australian currencies rose to their highest price points since January against the greenback after a less than expected contraction in China’s import and export data. This was a boost for those commodity currencies.

The dollar rose to its highest price point against the yen in over two months. The greenback was supported by a boost in Treasury yields as traders are waiting on the Federal Reserve Board rate and monetary policy decision.

Trader sentiment has improved as Forex traders are focusing on an economic rebound from the coronavirus pandemic. This has hurt the U.S. currency and turned on the risk-on switch.

The GBP/USD Forex market rose 0.25 percent to trade at 1.2704 during the Asian trade session. This was the British pound’s highest price point since 12 March.

The USD/JPY currency exchange rate was trading at 109.67 yen. This was the greenback’s highest price in two months.

Labor Data Improves in the U.S. and the Dollar Moves Lower

The world’s largest economy, in the month of May, shockingly added jobs after record setting losses seen in April.

The U.S. unemployment rate also fell to 13.3 percent after hitting a post-Second World War high of 14.7 percent in April. This, if correct, the United States economy is starting to stabilize after the Covid-19 lockdown induced massive job cuts.

Forex traders are now waiting on the Federal Reserve to announce monetary policy before making large trades. Traders want to hear Fed Chair Jerome Powell over the recent steepening of the yield curve.