EUR/USD

The EUR/USD pair is showing a noticeable decline, opening with a negative gap on Monday and continuing the development of the strong "bearish" momentum formed last Friday. The instrument is actively testing 1.0750 for a breakdown, while trading participants expect new movement drivers to emerge. Investors have at their disposal quite a lot of news publications from the past week, among which are the 25-basis-point interest rate cut by the European Central Bank (ECB), as well as the May report on the US labor market. The decision of the European regulator coincided with analysts' forecasts, so the market reaction turned out to be very restrained. In addition, officials warned that it is still somewhat premature to talk about a final victory over inflation and a reversal of the trend in monetary policy. In turn, Friday's report on the US labor market turned out to be significantly better than expected, which provoked a wave of active sales of the euro against the dollar. Nonfarm Payrolls added 272.0 thousand in May, which turned out to be significantly better than forecasts of 185.0 thousand, while in the previous month the figure was revised from 175.0 thousand to 165.0 thousand. At the same time, Average Hourly Earnings accelerated from 4.0% to 4.1% with preliminary estimates of 3.9% in annual terms, and increased from 0.2% to 0.4% in monthly terms, and the Unemployment Rate adjusted from 3.9% to 4.0%. The focus of investors' attention this week will be on the meeting of the US Federal Reserve, which will take place on June 12: analysts assume that the regulator will not change the parameters of monetary policy, but updated forecasts for the future dynamics of interest rates may have a noticeable impact on the market. Markets are currently considering two main scenarios, the first of which involves two 25 basis point adjustments at the end of the year, and the second one supposes only one adjustment.

GBP/USD

The GBP/USD pair is declining, developing the "bearish" momentum formed at the end of last week, when the May statistics on the US labor market arrived on the market. The American economy created 272.0 thousand new jobs outside the agricultural sector after 165.0 thousand in the previous month, while analysts expected 185.0 thousand. This significant recovery in the labor market is likely to influence future decisions by the US Federal Reserve regarding borrowing costs. The regulator's next meeting will take place on Wednesday, June 12, and markets are confident that officials will not change the parameters of monetary policy, but for the first time in the last three months, forecasts for future rates (the so-called "dot plot" charts) will be updated. Currently, about 40.0% of analysts expect the US Federal Reserve to cut interest rates twice by 25 basis points at the end of the year. Approximately the same number of experts expect only one adjustment in the rate in December. The statistics from the UK, released on Friday, did not have a noticeable effect on the dynamics of the instrument. Meanwhile, the Halifax House Price Index in May quarterly increased from 1.1% to 1.5%, which was above expectations at 1.2%, and in monthly terms the indicator lost 0.1% after zero dynamics of April, while markets were expecting 0.2%. Tomorrow, data on the UK labor market for April and May will be presented. Among other things, forecasts assume an increase in Claimant Count from 8.9 thousand to 10.2 thousand, and the Average Earnings Including Bonus in April is expected to remain at the same level of 5.7% and Average Earnings Excluding Bonus — at 6.0%.

NZD/USD

The NZD/USD pair is recovering from last Friday's sharp decline. The instrument is again trying to consolidate above 0.6100 amid the absence of drivers for an upward movement, so trading participants focused on the final report on the US labor market, which turned out to be significantly better than forecasts. In May, the national economy managed to create 272.0 thousand jobs outside the agricultural sector, while analysts expected an increase from 165.0 thousand to 185.0 thousand. At the same time, investors also drew attention to the acceleration of Average Hourly Earnings in annual terms from 4.0% to 4.1% with preliminary estimates of 3.9%, and in monthly terms the figure adjusted from 0.2% to 0.4%, which also turned out to be higher than the expected 0.3%. Such dynamics indirectly indicate the persistence of inflation risks, which prevent the US Federal Reserve from returning to a looser monetary policy and may mean that this year the monetary authorities will implement only minimal plans to adjust borrowing costs, reducing it once at the end of the year. The Fed's meeting will take place on Wednesday, June 12, after which updated forecasts on interest rate dynamics will be presented for the first time in three months. The New Zealand dollar was given some support by statistics from China published on Friday, where Exports in May added 7.6% after rising 1.5% in the previous month, while analysts expected 6.0%, and Imports slowed down sharply from 8.4% to 1.8%, below expectations of 4.2%, which led to an increase in the trade surplus from 72.35 billion dollars to 82.62 billion dollars, with preliminary estimates of 73.0 billion dollars.

USD/JPY

The USD/JPY pair is showing moderate growth, developing the "bullish" momentum in the ultra-short term, which began to form in the middle of last week, when the instrument retreated from the local lows of May 16. Quotes are testing 157.15 for a breakout, while trading participants evaluate statistics from Japan published today. Gross Domestic Product (GDP) in the first quarter in annual terms lost 1.8% after –2.0% in the previous period, while analysts expected –1.9%, and the quarterly figure decreased by 0.5%. In turn, Bank Lending slowed down slightly from 3.1% to 3.0%, contrary to neutral forecasts. The Eco Watchers Current Situation index dropped from 47.4 points to 45.7 points in May, while analysts expected the indicator to rise to 48.9 points, and the Outlook decreased from 48.5 points to 46.3 points. The Japanese Household Spending index fell by 1.2% in April instead of growing by 0.2%, and on an annualized basis the indicator added 0.5% with preliminary estimates of 0.6%. Meanwhile, the US currency continues to be supported by a strong report on the US labor market, published last Friday. The American economy created 272.0 thousand new jobs outside the agricultural sector in May after an increase of 165.0 thousand in the previous month, while experts expected 185.0 thousand. Average Hourly Earnings in annual terms accelerated from 4.0% to 4.1%, contrary to forecasts of a slowdown to 3.9%, and in monthly terms — from 0.2% to 0.4%, against expectations of 0.3%. The labor market report will influence the US Federal Reserve's decisions on interest rates. The next meeting will take place on Wednesday, June 12, and although investors are confident that borrowing costs will remain at 5.50%, updated interest rate forecasts may slightly adjust their activity in the market.

XAU/USD

The XAU/USD pair is consolidating near 2290.00 in anticipation of new drivers. Last Friday, May statistics on the US labor market arrived on the market, which led to a significant strengthening of the American currency across almost the entire market spectrum. The report reflected the creation of about 272.0 thousand new jobs by the American economy outside the agricultural sector, which was significantly higher than expectations of 185.0 thousand, while in the previous month the figure was 165.0 thousand. Average Hourly Earnings in annual terms accelerated from 4.0% to 4.1%, contrary to forecasts of 3.9%, and in monthly terms — from 0.2% to 0.4%, while analysts expected 0.3%. Strong labor market data has weakened the likelihood that the US Federal Reserve will move to ease monetary policy in the next few months. However, trading participants still expect one or two reductions in borrowing costs before the end of the year. The next meeting of the regulator will take place on Wednesday, June 12, and, in addition to the decision on the interest rate (expected to remain at the same level of 5.50%), updated forecasts for the future will be published there. Officials may say whether they plan to adjust the rate before the end of 2024 and, if so, at what pace. Also, last week the European Central Bank (ECB) lowered the interest rate by 25 basis points, which created a certain precedent in the market, but added to the attractiveness of the American currency. A similar step is also expected from the Bank of England by the end of June.