The US Dollar was under pressure ahead of the release of key labor data.
On Thursday, the greenback had hit a 3-week peak after data suggested a stronger than expected improvement in that vital sector of the US economy. The ADP employment change report showed a significant jump in new private sector jobs, to 978,000 in May against an anticipated 650,000; the previous report was revised lower. Market players are now anxious to see what will happen when the US Labor Department releases its Non-Farms Payroll report for May later today. According to the latest poll of analysts and economists, the numbers are expected to show a rise to 644,000; if that data follows suit and surprises markets, the greenback's volatility is likely to surge.
In Tokyo trading as of 10:19 am, the USD/JPY was trading at 110.1850 Yen, down 0.13% with the pair ranging from a trough of 110.136 Yen to a peak of 110.335 Yen. The GBP/USD was trading at higher at $141.07, a gain of 0.0383%, off the session high of $1.41132. The EUR/USD was flat at $1.2132.
Canadian Labor Data also in Focus
The Canadian Department of Statistics is also due to release its labor figures for the month of May. Analysts are predicting that the Canadian Unemployment Rate will rise to 6.2%, up from 6.1%. The net change in employment is expected to come in at -20,000. The concern for market players is that the rapid rise in the participation rate could have a negative impact on inflation. With most of the world's major economies attempting to resume some degree of normalcy now that the Covid-19 vaccine programs are moving into higher gear, the concern is the potential for a surge in inflation. Central bankers are closely monitoring that situation with a view to tightening the money supply. The pair most impacted by the Canadian Labor data is the USD/CAD which is trading at C$1.2119, a gain of 0.11%.