Asia FX steadies on strong US jobs data.
Asian currencies steadied on Monday after sliding in the previous trading session, as investors weighed the outlook for U.S. interest rates following stronger-than-expected U.S. jobs data, while escalating tensions in the Gulf kept risk appetite in check.
The US Dollar Index was muted near a two-month high during Asian hours after jumping 0.7% on Friday. US Dollar Index Futures also traded flat.
Strong US jobs data spark Fed hike bets
Friday’s payrolls report showed the U.S. economy added 172,000 jobs in May, well above market expectations, reinforcing views that the Federal Reserve could keep monetary policy tighter for longer.
Markets have increased bets on a Fed rate hike later this year, with traders now assigning a higher probability to a move by December.
Oil prices surge 5%.
Oil prices jumped nearly 5% on Monday after Israel struck a petrochemical plant in southwestern Iran and other military targets in retaliation for Iran’s missile barrages toward Israel, threatening a fragile ceasefire and dimming hopes for a negotiated end to the conflict.
As of 02:16 ET (06:16 GMT), Brent Oil Futures expiring in August advanced 4.7% to $97.44 per barrel, while West Texas Intermediate (WTI) crude futures climbed 4.5% to $94.62 per barrel.
Both contracts ended last week with modest gains, with fresh hostilities across the Middle East dampening truce hopes.
The gains extended after Israel said it had targeted military sites in western and central Iran, as well as a petrochemical facility near Mahshahr, marking one of the most significant attacks on Iranian energy-linked infrastructure since a ceasefire was reached in April.
The latest strikes came after Iran launched several rounds of missiles at Israeli targets in retaliation for Israeli attacks on the outskirts of Beirut.
U.S. President Donald Trump had urged Israeli Prime Minister Benjamin Netanyahu not to retaliate against Iran’s missile attack, according to reports.
Gold prices hit 11-wk low on Fed rate concerns.
Gold prices extended losses in Asian trading on Monday, hitting their lowest in 11 weeks, as robust U.S. jobs data reinforced expectations of higher-for-longer Federal Reserve interest rates, while a rebound in oil prices amid renewed Gulf hostilities fueled inflation concerns.
Spot gold was last down 0.4% at $4,312.08 an ounce by 23:00 ET (03:00 GMT), reaching their lowest since March 23.
U.S. Gold Futures for August delivery slipped 0.7% to $4337.10/oz.
The precious metal slipped more than 3% on Friday as investors reassessed the outlook for U.S. monetary policy following stronger-than-expected labor market data.
Data showed on Friday the U.S. economy added 172,000 jobs in May, well above economists’ forecasts, while the unemployment rate held steady at 4.3%.
The report prompted traders to scale back expectations for near-term Federal Reserve rate cuts, pushing Treasury yields and the U.S. dollar higher and reducing the appeal of non-yielding assets such as gold.
“Despite the lack of consistent messaging in the labour market data, we now have a rate hike fully priced at the December FOMC meeting,” ING analysts said in a recent note.
Adding downward pressure, oil prices surged after Iran launched several rounds of missiles toward Israel in response to an Israeli strike on the outskirts of Beirut, raising fears of a broader regional conflict and threatening a fragile ceasefire.
Important Note: The information found on Ausprime platform is intended only to be informative, is not advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not include any specific investment objectives, financial situation and needs of any specific person who may receive it. The past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statement
