US FX WRAP: Dollar gains after strong jobs report

The Dollar was firmer on Friday, and supported by the strong US jobs report, which bolstered the likelihood of Federal Reserve rate hikes this year, with now 25bps priced in by year-end vs. 16bps pre-data. Looking at the data, the headline surged to 172k from 179k (revised from initial 115k), way above the expected 85k and outside the top end of the forecast range. In addition, the Fed goes on blackout this evening ahead of the June 17th confab.

G10 FX saw weakness against the Dollar, given the Greenback's strength, as opposed to anything currency-specific. Antipodeans were the underperformers, and saw a double whammy from risk-off sentiment, given the extensive losses seen in US indices. Swissy was one of the next worst performers, and also pared back some of Thursday's outperformance. For the Pound, BoE's Dhingra remarked it is very hard to say what her future rate decisions will be, it depends on energy prices.

JPY and CAD were the two relative G10 outperformers, albeit still seeing slight losses vs. the Buck. The Loonie was supported by a stellar domestic jobs report of its own, whereby the Canadian economy added 87.8k jobs in May, far above the expected 10k and April's loss of 17.7k jobs. On the trade footing, US, Mexico, and Canada are reportedly poised to miss July 1st USMCA renewal deadline. USD/JPY hovered around 160, and continues to trade off its own intervention worries, and post US jobs report, the Yen saw a sharp bout of strength, and although the move swiftly pared, it prompting some intervention and/or rate-check speculation. Overnight, PM Takaichi said there are pros and cons to a weak Yen, adds investment strategy will help maintain trust in the yen and her economic policy is aimed at boosting Japan's economic capability, not at FX manipulation.