US Open Note – Dollar rally stalls despite strong jobless claims and PPI

Jobless claims fall again but dollar slips

The producer price index and initial jobless claims out of the United States are in the spotlight today after last week’s disappointing jobs report and the surprise jump in inflation yesterday.

US initial jobless claims declined to 473 thousand in the week ended May 7 versus 490K forecast after Wednesday’s inflation shock and the Federal Reserve was clear that the employment outlook will have to notably rise before there is a change in monetary policy. Annual inflation climbed to the highest figure since 2009, beating expectations. The producer price index increased to 6.2% y/y from 4.2% before, surpassing expectations.

The US dollar index is steadying after coming close to the 91.00 round number following Wednesday’s buying interest, while dollar/yen has lost momentum and is hovering near the 109.70 resistance. Euro/dollar is also flattening near the $1.2670 level, meeting the 20-day simple moving average (SMA). The British pound is falling back below $1.4040 despite the BoE Chief Economist Haldane sounding positive on the UK outlook.

US stock futures are set for a positive open on Thursday, ending yesterday’s selling interest.

Walt Disney is announcing its earnings after the US market open, and Disneyland has now reopened, and tourists have started visiting again.

European stocks are falling significantly amid fears that rising inflation might boost central banks to tighten monetary policy earlier.

Oil retreats; commodity currencies ease

The aussie is continuing the sell-off move against the greenback after a strong decline yesterday, but the kiwi has turned positive ahead of the US open. Dollar/loonie is rebounding on the six-year low of 1.2045.

Elsewhere, oil prices have dived to $64.30/per barrel, flirting with the long-term ascending trend line. However, these losses may not last long, as the International Energy Agency stated, that the demand for crude is outpacing supply. The yellow metal is flattening near $1,817/per ounce, pressured by higher Treasury yields.

Vaccination rollout news

The vaccination across the UK is accelerating in areas that coronavirus cases are still high, however, the restrictions will be eased further next week. Also, the UK is thinking of buying additional AstraZeneca doses, while Norway has removed the AstraZeneca vaccine from its program. In the US, Phizer/BioNTech shots have been approved to be used for adolescents.

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