The US dollar showed strength in North America following a stronger-than-expected JOLTS report but faced renewed selling pressure today. Despite this, the overall market sentiment reflects consolidation rather than a clear directional shift. The dollar slightly weakened against most G10 and several emerging market currencies. Recent PMI data for May showed modest upward revisions, recovering from earlier declines caused by US tariffs. The Bank of Canada, following stronger inflation and Q1 GDP data, is likely to hold interest rates steady, though its easing cycle is not complete. The ECB, meeting tomorrow, is widely expected to lower rates by 0.25%, with a pause likely as the neutral rate nears.

Asia Pacific Markets

In the Asia Pacific region, the Japanese yen saw fluctuations, initially recovering but later losing steam near resistance levels. Despite upward revisions to Japan’s final service and composite PMI figures, market impact was minimal. The yen found temporary support near 143.80 per dollar.
Meanwhile, the Australian dollar continues to struggle with resistance near the $0.6500 mark. Weak Q1 GDP data, showing just 0.2% growth versus 0.6% previously, pushed the currency lower. Final PMI readings aligned with a gradual slowdown. Australia’s upcoming trade and spending data may influence the next moves.

European Markets

The euro faced selling pressure after being rejected at $1.1455, retreating to support near $1.1365. Though final PMI readings were revised higher, the services index stayed below 50 for the first time this year, signaling contraction. The composite PMI stayed marginally above the 50 threshold, offering little new insight for the ECB ahead of its rate decision.
Sterling remained stable, confined within Monday’s trading band. Revised UK PMI data showed improvement, with services and composite figures climbing above 50 again. Markets largely dismissed the data, with expectations holding firm that the Bank of England won’t cut rates before November.

American Markets

The US dollar index rebounded from a six-week low to nearly 99.35 following upbeat job opening figures. Despite encouraging elements in the JOLTS report, such as higher layoffs and fewer quits, the dollar couldn't break past earlier highs. It’s now hovering around the 99.00 level. Survey data like ISM services and final PMI hold limited sway over Fed policy, keeping focus on labor market indicators. The Beige Book, despite being anecdotal, may offer insight, though attention shifts to ADP jobs data. Historically, ADP estimates have varied from BLS figures, recently tending to overstate job creation by about 20,000 monthly.