After leaping to a fresh session high with a knee-jerk spike following the NFP data from the U.S., the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, erased its daily gains and fell to a fresh six-month low at 99.50. As of writing, the index was at 98.53, losing 0.08% on the day.
It would be fair to say that the positive employment numbers from the U.S. failed to provide meaningful support for the greenback. Even the weak readings in March couldn’t change Fed’s view on the labor market as the latest FOMC monetary policy statement highlighted that the labor market was continuing to strengthen. Today’s data revealed that the nonfarm payrolls rebounded to 211K in April while the unemployment rate fell to 4.4% from 4.5%.
Now the investors are waiting for the Fed speakers, who are likely to give some fresh insights regarding the timing of the next rate hike. Fed’s Vice Chair S.Fischer will be accompanied by San Francisco Fed’s J.Williams (2018 voter, hawkish) and Boston Fed’s E.Rosegren at a panel on “The Structural Foundations of Monetary Policy.”
With a break below 98.50 (daily low), the index could aim for 97.60 (Nov. 1 low) and 97 (psychological level). To the upside, the initial resistance aligns at 99 (psychological level) ahead of 99.75 (Mar. 23 low) and 100 (psychological level).