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The Greenback ends as a net loser on the week, only able to make gains against the other “safe haven” majors as market players went into risk-on mode.

Aside from the continued “reopening” theme driving risk sentiment more towards positive this week, mass U.S. protests and continued U.S.-China tensions were hurting the dollar’s attractiveness as well.

Overlay of USD Pairs: 1-Hour Forex Chart
Overlay of USD Pairs: 1-Hour Forex Chart
USD Weekly Performance from MarketMilk
USD Weekly Performance from MarketMilk

United States Headlines and Economic data

Monday:

Poor start to the week for the Greenback against most of the majors as traders continued to mainly focus on the “reopening trade,” supported on Monday with better-than-expected Chinese manufacturing PMI data.  It’s also likely the continued U.S.-China tensions (China cuts US ag purchases) &  mass U.S. protests over the weekend may have been negatively priced in as well.

ISM Manufacturing PMI at 43.1 in May vs. 41.5 in April

US construction spending falls 2.9% in April with residential building down sharply

Trump threatens military force if violence in states isn’t stopped

 

Tuesday:

US Home prices in April saw biggest gain in 2 years, but they’re expected to drop by next year

New York ISM Current Business Conditions rose 15.2 points to 19.5 in May

US cities erupt in more violence amid threats from Trump

Positive risk sentiment picked up steam, likely on news that China bought U.S. soybeans after halt to U.S. purchases ordered, easing U.S.-China tensions a bit for traders, which didn’t seem to help the dollar much against the higher-yielding currencies.

Wednesday:

We saw up and down action for USD during the London trading session, which seems to correlate with the release of European and UK PMI data (improving but still showing severe contraction). Risk-on came back during the US session on a refocus back to the “reopening trade,”  and possibly on covid vaccine developments (US should have a “couple hundred million” doses of a Covid-19 vaccine by start of 2021, Fauci says).

US Mortgage demand from homebuyers jumps 18%, as interest rates set another record low

US Private payrolls decline by 2.76 million in May, ADP says, a much smaller drop than feared

ISM non-manufacturing activity index rose to a reading of 45.4 last month from 41.8 in April

U.S. factory orders extend decline in April

Fed expands municipal liquidity program to include transit, airports, utilities

Thursday:

U.S. weekly jobless claims totaled 1.877 million last week vs. the Dow Jones estimate of 1.775 million.

U.S. Exports, Imports Fell Sharply in April Amid Coronavirus Disruptions

We saw a bump up in broad positive risk sentiment on Thursday to add to the dollar’s woes, correlating with the latest statement from the European Central Bank after ramping up its pandemic bond buying to 1.35T euros.

Friday:

May sees biggest U.S. jobs increase ever of 2.5 million as economy starts to recover from coronavirus – this definitely surprised market players and kicked positive risk-on sentiment into high gear during the U.S. trading session. We saw mixed reaction in the Greenback against the majors, higher against the low-yielders/safe havens while falling against comdolls and Sterling.