The U.S. Dollar Index is higher today, its first gain following three consecutive daily declines. Support at 104.00 prevented further dollar losses. Attention now turns to support at 103.75, where a weekly close below that level will make the dollar vulnerable to additional declines as low as 103.00.
The dollar’s biggest gains are against currencies tied to commodities: +1.16% vs. NOK, +0.63% vs. AUD, +0.39% vs. CAD & MXN and +0.38% vs. SEK.
USDMXN is +4.14% since the weekend’s presidential election.
Recent data pointing to developing U.S. economic weakness and OPEC+ members considering raising production has put swift downward pressure on oil prices, currently -8.61% since last Tuesday. Oil is now +1.70% YTD at $72.82/barrel, distant from its $86.91 2024 high.
Treasuries are higher after today’s JOLTS (job openings) number fueled bets on an accelerated Fed rate cut start. April JOLTS was 8059k, well below the 8350k estimate and the lowest tally of job openings since March of 2021. The weak JOLTS shifts attention to Nonfarm payrolls for May, due for release this coming Friday.
U.S. Treasury yields are lower today in most tenors with the 7-year yield leading the way, -0.049%. Odds of a September cut increased to 59.0% and odds of a December cut climbed to 67.3%.
Traders are anticipating a 25 basis-point cut from the ECB at Thursday’s policy meeting. Overnight index swaps are pricing in a 99.5% probable cut.
