The US Dollar (USD) consolidated its recent gains against major currencies, buoyed by positive macroeconomic data from the United States and ongoing uncertainty in US-Iran negotiations [1]. Midweek, the USD was notably strong, with the largest appreciation seen against the New Zealand Dollar, rising 1.86% for the week. Gains were also recorded against the Japanese Yen (0.90%), Canadian Dollar (0.63%), and Swiss Franc (1.43%) [1].
Key economic data released included a 122,000 increase in private sector employment for May, surpassing both the previous month's 105,000 and market expectations of 117,000 [1]. Additionally, the ISM Services PMI climbed to 54.5 in May from 53.6, indicating an accelerating expansion in the US service sector [1]. Following these releases, the USD Index reached its highest level since early April, moving above 99.50 before entering a consolidation phase [1].
Market reactions were mixed. While the USD Index remained elevated, US stock index futures traded mixed after Wall Street's main indexes closed significantly lower on Wednesday [1]. The article also noted that market participants are closely watching upcoming US Initial Jobless Claims data and the critical Nonfarm Payrolls (NFP) report for May, which could further influence market direction [1].
Geopolitical developments also played a role, as negotiations between the US and Iran showed little progress. Meanwhile, Israel and Lebanon agreed to renew a ceasefire, contingent on a complete cessation of fire by Iran-backed Hezbollah, following US-led talks in Washington [1].
CONCLUSION
The US Dollar's strength was underpinned by better-than-expected economic data and persistent geopolitical uncertainty. While the currency consolidated gains, market participants remain attentive to upcoming US labor data and ongoing international negotiations, which could shape future market movements.