The U.S. dollar was seen trading flat on Thursday as investors prepared for Friday’s payrolls report. On the political front, the U.S. steel and aluminum tariffs go into effect from Friday. Canada, Mexico and the EU are some of the economies that would be hit by the new tariffs.
EU officials vowed to retaliate against the tariffs which once again raise the specter of a full-blown trade war. On the economic front Canada’s GDP increased 0.3% on the month which was better than expected. In the U.S. the core PCE price index showed a 0.2% increase on the month while both personal spending and income grew better than expected.
Investors will be geared into the U.S. nonfarm payrolls report that will be released later today. Economists forecast that the U.S. unemployment rate was steady at 3.9% while estimating that the average number of job gains during May increased 189k. This marks a slightly higher print compared to 164k jobs added in April. Wage gains are expected to accelerate at a pace of 0.3% on a month over month basis.
Following the payrolls report, the monthly ISM manufacturing PMI data is expected to be released. Estimates show a rebound in manufacturing activity from 57.3 in April to 58.2 in May.
Data from the Eurozone will see the release of the manufacturing PMI including that from the UK.
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