Forexlive Americas FX news wrap: US dollar shakes off PPI and jobless claims misses

• US May PPI 2.2% y/y vs +2.5% expected
• US initial jobless claims 242K versus 225K estimate
• US Treasury auctions off $22 billion of 30-year bonds at a high-yield of 4.403%
• Treasury Secretary Yellen: Strong US growth is lifting global growth
• BOC’s Kozicki: We expect to end quantitative tightening at some point in 2025

Markets:

• Gold down $19 to $2303
• WTI crude oil down 52-cents to $77.98
• CHF leads, EUR lags
• US 10-year yields down 5.1 bps to 4.24%
• S&P 500 up 13 points to 5433

The US dollar is showing some impressive chops but it’s unclear whether that’s due to economic resilience or the mess in European politics. I’d lean to the latter as France descends into turmoil following the election call and the market shifts to Treasuries from European sovereigns.

That was underscored by a second strong US Treasury auction this week as 30s stopped through by 1.5 bps.

What makes the US dollar performance particularly impressive today was that it came after cool PPI and jobless claims numbers. Those initially led to some selling in the dollar but the 20-30 pip moves were reversed in short order.

The euro was the laggard as selling intensified in the second half of the day, particularly as eurozone equities were beaten up.

The yen was soft yesterday and again today with the Bank of Japan decision just a few hours away. The pair has traded in a range of 156.59 to 157.33 today, finishing close to the midpoint on declining Treasury yields.

Equities were led once again by tech and AI but the breadth of the move is increasingly worrisome as most of the market was red, and cyclicals in particular.

I spoke with BNNBloomberg about the dimming outlook for the Canadian dollar.

This article was written by Adam Button at www.forexlive.com.