Dollar declines to one-week trough ahead of US monthly jobs data

Dollar declined in European trade for another session, plumbing one-week trough off 11-week highs after Congress passed the bill to raise the US debt ceiling. 

Dollar is on track for the first weekly loss in a month following more bearish remarks by Fed officials, which caused a reversal in pricing for US interest rates in June. 

Now investors await a batch of crucial US payrolls data to better gauge the path ahead for monetary policies.

The Index

The dollar index fell 0.2% to 103.38, the lowest in a week, with a session-high at 103.59, after losing 0.7% yesterday, the largest loss since May 3 on profit-taking off 11-week highs at 104.69 and amid improving risk appetite. 

Recent data showed US manufacturing sector tumbled in May, renewing concerns about US recession during the second quarter.

The dollar index remains down nearly 0.8% this week, on track for the first weekly loss in a month. 

US Debt Ceiling 

Congress passed the bill raising the US debt ceiling,  this week with all that's left now is President Joe Biden's signature.

Such a bill will raise the debt ceiling until January 1st, 2025, and will put aside such dangerous political risks for until after the 2024 presidential elections.

Fed Remarks

Federal Reserve member Philip Jefferson said it's likely the Fed will maintain rates unchanged at the June meeting.

Philadelphia Fed President Philip Jefferson said he prefers for the Federal Reserve to stop raising interest rates at the next meeting as rates approach neutrality.

Such remarks caused pricing for a 0.25% Fed rate hike in June to collapse from 65% to just 23%. 

US Jobs

Now investors await crucial US jobs data to better gauge the path ahead for monetary policies.