Tuesday's session saw the yen recover +1% against the dollar and +1.2% against the euro, but the improvement fizzled out: the Japanese currency fell back -0.9% against the greenback 156.2 and 0.65% against the euro.

The $-Index recovered by 0.25% to 104.40... and this was essentially due to the yen's weakness: currency traders were not convinced of the BoJ's willingness to support its currency to contain rising inflation, as the priority remained boosting exports.

For its part, the euro lost 0.15% against the dollar to 1.0860 at the end of a session rich in statistics, which could have given it a boost, but failed to do so: forex traders prioritized the prospect of a rate cut (-25pts to 3.75%), which could be accompanied by accommodating rhetoric from the ECB.
Christine Lagarde will have the opportunity on Thursday to enlighten the markets on the initiation - or otherwise - of a monetary easing cycle, which could begin tomorrow.

The dollar seems to remain hesitant (the short-term trend remains 'weak') following the publication of contrasting statistics: a flamboyant ISM 'services' report and an ADP survey validating a slowdown in activity.

The US private sector generated just 152,000 jobs last month, below economists' expectations (180.000), according to the monthly report by business services firm ADP (Automatic Data Processing).

'Job gains were slower in May due to a sharp decline in manufacturing.
Leisure and hospitality also posted weaker hiring', it explains in its report.

However, the scenario of an economic slowdown in the US is partly belied by the upturn in activity in the service sector (70% of GDP), which returned to growth in May (+4.4 points to 53.8 last month from 49.4), according to the latest survey of purchasing managers by the Institute for Supply Management (ISM).

The sub-index measuring production in services rose to 61.2 from 50.9, as did employment, which stood at 47.1 after 45.9 the previous month.
The new orders index also improved, rising to 54.1 from 52.2 in April.

In Europe, market participants had taken note of a number of statistics.
In line with the trend observed since the beginning of the year, the HCOB composite PMI index for overall activity in the eurozone rose to 52.2 in May, from 51.7 in April, and thus reached its highest level for a year.
In Germany, 'services' activity reached an annual zenith and its highest level since June 2023.

In France, on the other hand, the HCOB PMI composite index of overall activity fell for the second time since December 2023, to 48.9 in May from 50.5 in April, signalling a return to contraction after the weak growth recorded the previous month.


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