The US Dollar recorded its best week of the year, up around 1.2% and almost reaching 2017 closure levels. It started Friday with a slight gain, probably related to the lack of progress made on the US-China trade talks but it then dropped close to session lows after US non-farm payrolls came weaker than expected for April (164k vs. 193k expected). It didn’t take long for the USD to recover and reach levels not seen since January. Non-farm payrolls came weaker than expected, but March number was revised higher to +35k. Manufacturing payrolls came stronger, and more importantly, the unemployment rate dropped to 3.9% (vs. 4% expected), the lowest since December 2000.
For the week ahead, US Consumer Price index will be released on Thursday, and we will have the next round of US-China trade talks, if headlines start showing further threats of tariffs, expect more USD strength, on the back of risk-off sentiment. Also, Geopolitics will remain in focus this week as President Trump is supposed to decide by May 12th if the US pulls out of the Iran nuclear deal.