TD Securities: If U.S. unemployment rate rises unexpectedly, the dollar may decline

TD Securities strategists stated in a report that if Friday’s US non-farm payroll report shows an unexpected rise in the unemployment rate, the US dollar could weaken. They noted that the unemployment rate for May could rise to 4.4% from April’s 4.3%, while analysts on average expect it to remain stable. They indicated that this could cause the DXY index to briefly fall below 99.00 from its current level of 99.236. After that, market attention will shift to news regarding the US and Iran as well as the May inflation report to be released on June 10. They stated that a rise in the unemployment rate could open the door for the new Federal Reserve Chair, Kevin Walsh, to provide a slightly dovish policy outlook supporting easing measures on June 17, which is a risk that is not fully priced in by the market.