● The US Department of Labor will release its report on Friday, July 5. Nonfarm payrolls are expected to fall to 190,000 in June. The unemployment rate is expected to remain at 4.0%.
● Since the beginning of the year, the attention of financial market participants has increasingly shifted to data related to the US labor market, which has a significant impact on the dollar exchange rate.
● The dollar index rose in the previous month to 105.85 points.
On July 5, the US Department of Labor is scheduled to report another report on the number of people employed in the non-farm sector. According to experts’ expectations, the number of workers will decline to 190 thousand in June, although this figure was at 272 thousand in May. At the same time, according to expectations, the unemployment rate will remain stable at 4.0%. The US Federal Reserve is already receiving positive signals for lower inflation and unemployment data along with non-farm payrolls data may strengthen sentiment towards lowering interest rates in the coming months. As a result, the change in interest rates will have a strong impact on the entire financial market and on investor sentiment. The JOLTS job openings data on Tuesday showed an increase of 221 thousand from the previous month to 8.140 million in May 2024, exceeding expectations. This data provides a positive signal for a possible decline in unemployment. Average hourly earnings for all employees in the private non-farm sector in the United States rose 14 cents, or 0.4%, to $34.91 in May 2024. The unemployment rate in the United States hit a two-year high of 4.0% in May 2024, the lowest in more than two years. Analysts believe that the unemployment rate in June will remain at the May level of 4.0%. “The increase in job openings can help address the problem of rising unemployment, and thus inflation,” said Kar Yong Ang, financial market analyst at Okta. “Rising unemployment amidst increasing job openings indicates that the available jobs are not meeting the expectations of the population. Therefore, the labor market is slowing down,” he added. Over the past month, the US Dollar Index has risen 1.17% to 105.85 points. In case the support level of 104 points is broken, the US Dollar Index can be expected to decline further to 101.9 points. However, if the uptrend since the beginning of the year continues and settles above the 106.5 level, market sentiment will favor the USD bulls.
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