The dollar tested a major support against the euro (which rose above 1.0900 this morning) and then abruptly turned upwards following the publication of better-than-expected employment figures.
The $-Index rebounded "right" from the 104 support level of April 10, climbing +0.8% to 104.90... making it positive again for the week at +0.15%.
The Euro stalled symmetrically (-0.8%), just above 1.0800, and went from positive +0.5% over the week to -0.35% on the eve of the weekend (making a big gap between the week's extremes in just a few hours).

The Swiss Franc also lost 0.8% against the Dollar, the Pound -0.55% and the Yen -0.65% towards 156.60.
The greenback was boosted by a +15Pts surge in the yield on the T-Bond 2034 to 4.4300%, while Bunds and OATs tightened by only +7 to +8Pts.
Expectations of a rate cut by the FED in early September -which had risen to 70% the previous day- fell back sharply (it's almost 50/50 this evening).

Indeed, the US economy remains more robust than expected: it generated 272,000 non-farm jobs in May.000 non-farm jobs in May, according to the Labor Department, well above market expectations, which were generally in the region of 175,000.
Non-farm job creation for the previous two months was revised slightly downwards, from 315,000 to 310,000 for March and from 175,000 to 165,000 for April, for a total balance of -15,000 for these two months.
The unemployment rate rose by 0.1 points to 4%, whereas economists were expecting it to remain stable at 3.9%, while the labor force participation rate stood at 62.5% (NB: the unemployment rate had been below the 4% mark for over two years now, the first time this had happened since the 1950s).
The other negative indication is that average hourly earnings rose at an annual rate of 4.1% instead of 3.9%.

It will be difficult for the FED to adopt a dovish tone for next week's FOMC... but beyond the employment figures, investors know that a rate cut in the US is essentially conditional on inflation returning below the symbolic 3% threshold, which is far from a given.

It's not illogical to see a pullback in the Euro in the wake of the ECB's first rate cut since 2019... but this morning, when the Dollar was threatening to breach its support, the thesis was that further easing in September was uncertain (while the FED will be next to act) and the ECB's gesture 'in the cards': the Euro fell - just as logically - on the 'fait accompli'.

In terms of European figures, Q1 GDP (seasonally adjusted) rose by 0.3% in the eurozone and the EU, compared with the previous quarter, according to Eurostat, which thus confirms its previous estimates.

In the eurozone, growth was driven by positive contributions from household final consumption expenditure (+0.1 points) and foreign trade (exports minus imports, +0.9 points).


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