Forex today: dollar remains within the bounds of lows within a minor recovery

Forex today was seeing an attempt of a come-back in the dollar and US yields after a disappointing end to last week post nonfarm payrolls. 

The nonfarm payrolls were the clincher for the Fed and held the fate for the greenback. The initial response was a sell-off on the headline, but once the detail had been digested, the market's response this week is that the Fed will hike in June on a 'good-enough' report. 

However, the 10-year's, although up +0.80% at time of writing, they are still subdued, with the US 10yr yield supported on 200 dma for the second day. Also, on the basis that the Federal funds futures imply traders see only a 52% chance Fed to raise rates to 1.25-1.50% at Dec meeting, according to CME group's Fedwatch, while investors elsewhere are sat on the sidelines. Stocks and gold flat, consolidating the dollar's broad-based weakness and US data continues to be unimpressive with the ISM Non-Manufacturing coming in weaker than expected. Oil was offered from $48.24 down to $46.67 the low with Arab powers severing Qatar ties, citing support for militants in the regions. 

The other key focus was, of course, with the pound. The latest terror attack in London over the weekend and the elections on the 8th June took the headlines. The terror attack was the third attack in just under three months in London that has been claimed by ISIS and while Londoners are a resilient lot, the implications for the UK economy is significant and will be a major factor swaying votes in this week's snap election. The conservatives have been on top all along although The polls are vastly different from ICM's latest that provide a landslide scenario in favour of the Conservatives while according to YouGov, we are looking the possibility of a hung parliament. 

Commodities were supportive of the antipodeans with copper and Iron-ore rallying and dollar within the bounds of recent lows. AUD +0.59% at 0.7487 and NZD ending the day lower from a high of 0.7150 ending at 0.7138. USD/CAD shorts were squeezed 1.3458 - 1.3502 the high. 

The day ahead

• 23:01 GMT BRC Retail sales YY -0.50% Rtrs f/c, 5.6% -prev
• 01:30 GMT Current account balance 0 bln Rtrs f/c, -3.9 bln -prev
• 04:30 GMT  RBA Cash rate 1.50 % Rtrs f/c, 1.50% -prev

Key notes from the US shift

• US Factory Orders: Somewhat better-than-expected, with room for improvement - Wells Fargo
• US ISM non-manufacturing: Sector continues to expand but a slower pace - Wells Fargo