Key Moments
- USD/SEK pair trades within striking distance of recent 1-week high
- US economy forecast to add 110,000 job positions in June, indicating resilient labor market
- Markets are pricing in a 64% chance of a Federal Reserve interest rate hike in September
The USD/SEK currency pair pulled back slightly on Thursday, but remained within striking distance of recent 1-week high, as focus set on the essential US employment data string.
US Non-Farm Payrolls figures in the spotlight
Investors now braced for the key US Non-Farm Payrolls report later in the day, which may provide fresh clues on the Federal Reserve’s monetary policy trajectory.
Employers in all sectors of the US economy, excluding farming, probably added 110,000 job positions in June, according to market consensus, following a job growth of 172,000 in May. If so, this would be the smallest monthly employment growth so far this year.
And, the US unemployment rate is expected to remain steady at 4.3% in June.
Despite the moderation in job growth, the June employment report is still expected to indicate a resilient labor market, with the low-hire, low-fire dynamic being firmly present.
Prior to the official NFP release, markets are pricing in an almost 64% chance that the Federal Reserve will raise interest rates in September and assigning nearly an 85% probability of at least one rate hike by year-end.
The latest US CPI figures showing consumer inflation at a three-year high in May undeniably supported such prospects.
Geopolitics support US Dollar’s safe-haven allure
Developments on the geopolitical front continued to favor demand for the safe-haven US Dollar. Indirect US-Iran discussions in Qatar did not indicate any progress toward a durable peace agreement, as frictions surrounding the crucial Strait of Hormuz waterway persisted.
US Treasury yields hold gains
The yield on benchmark 10-year US Treasury notes rose to 4.49% on Thursday, maintaining recent string of gains.
Sweden’s manufacturing activity highest since January 2022
In Sweden, the manufacturing sector has registered the strongest expansion since January 2022 in June, new data showed. The Swedbank Manufacturing PMI came in at 58.3 in June, up from 57.4 in May.
The improvement in activity was propelled by stronger production and order intake. Export and domestic orders grew, while suppliers’ delivery times shortened.
USD/SEK currency pair snapshot
The exotic Forex pair was last down 0.09% on the day to trade at 9.7168. The currency pair held in proximity to Wednesday’s high of 9.7694, its strongest level since June 25th.
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