The greenback is making up for Friday's losses to start the new week
The dollar is best performing major currency to start the day as it recoups losses from Friday after a not-so-stellar jobs report. The headline reading was poor, mainly due to less jobs growth in the manufacturing sector (trade war impact perhaps?) but the rest of the report wasn't that bad to be honest.
Markets want to believe that this will lead to increased odds of the Fed leaning to cut rates but a ~80% probability of a cut in July is a bit of a stretch for now in my view.
That said, don't count out dollar bears just yet. EUR/USD buyers are still in near-term control despite price closing in on the 1.1300 handle now with large expiries also seen at the figure level to potentially help form a base on price action.
But the big talking point today is that of risk sentiment as Mexico avoids tariffs from Trump, resulting in a fall in the yen and Treasuries while stocks gain some ground.
Meanwhile, China's trade balance data earlier was a mixed bag but I'm leaning more towards the pessimistic side as imports (domestic demand) struggled while exports were only boosted by pre-existing orders and that isn't a good indication of an improving outlook.
With some European markets closed today, expect thinner liquidity conditions as the general sense of the dollar steadying amid improving risk sentiment should continue to hold up ahead of North American trading later today.
