#OPINIONLEADER#

ByLCMS Traders FX Analysis Team

 JUN 5, 2021

(1) During its monetary policy meeting last Tuesday, the Reserve Bank of Australia (RBA) held interest rate at 0.10% while keeping quantitative easing (QE) at its current settings. The central bank expressed a slight optimism in the rate statement when they highlighted that “progress in reducing unemployment rate has been faster than expected” and that there was an “increased in borrowings by investors in the housing markets”. This slight optimism may contribute to the RBA’s QE evaluation during their next meeting on 6 July.

(2) OPEC+ has agreed to continue increasing oil production in July by 2.1 million barrels-per-day during their meeting last week. Saudi Energy Minister Prince Abdulaziz bin Salman expressed optimism in the oil market during his speech, highlighting that oil demand has clearly improved ever since the OPEC+ agreed to increase oil production in April. As a result, oil prices rose.

(3) The U.S. jobs data released last week led to strong moves in the U.S. dollar. On Thursday, the ADP non-farm employment change data reported 978,000 jobs increase in May, sending hopes that the U.S. job market has rebounded from its disappointing result in April. This led to the strengthening of the U.S. dollar across the board. However, the non-farm employment data released on Friday fell short of expectation when it reported 559,000 jobs were added as opposed to the expectation of 645,000 jobs. As a result, the U.S. dollar weakened even though unemployment rate continues to decline and that average hourly earning indicated continued increase in wages amid at a slower pace.

(4) The Canadian jobs report released indicated continued decline in jobs in May. The decline was caused by the third-wave COVID restrictions imposed across Canada with Ontario and Nova Scotia accounting for the highest number of employment decline.