US Dollar slumps to fresh 2017 lows post-NFP

The US Dollar Index – which tracks the buck vs. its main rivals – has plummeted to fresh 2017 lows in the 96.70 region following downbeat payrolls figures.

US Dollar sold off to 96.70 on data

The index quickly sunk to fresh YTD lows in the 96.70/60 band after US non farm payrolls failed to meet expectations in May, showing the economy added 138K jobs vs. 185K initially estimated and down from April’s 174K jobs (revised lower from 211K).

Further data saw the jobless rate ticking lower to 4.3% (vs. 4.4% forecasted) while average hourly earnings advanced 0.2% MoM and 2.5% over the last twelve months.

USD dropped to print fresh multi-month lows in the wake of the release along with US yields, with the 10-year benchmark also testing fresh yearly troughs around 2.16%.

Apart from the disappointing job creation and despite the lower unemployment rate, inflation pressures via wages still remain stagnant, motivating markets to increase the scepticism over a rate hike by the Fed at this month’s meeting.

US Dollar relevant levels

The index is down 0.39% at 96.78 facing the next support at 95.91 (low Nov.9 2016) seconded by 94.95 (low Sep.22 2016) and finally 94.44 (low Sep.8 2016). On the flip side, a breakout of 97.42 (high may 31) would open the door to 97.70 (high May 30) and then 97.87 (20-day sma).