Upbeat Data Lifts Greenback

Data compiled by ADP and Moody's Analytics showed that private US payrolls increased by 253,000 in May, topping the consensus estimate of analysts of anticipating private payroll growth of 185,000.

The ADP report is a precursor to the official nonfarm payrolls figures reported by the Bureau of Labor Statistics which are due later in the session, with positive job creation momentum expected. A Reuters survey of economists is forecasting the addition 185,000 jobs last month, down from April’s 211,000 new positions.

After a string of downbeat economic data points reduced the likelihood of action, a stronger than projected nonfarm count should revive expectations of a rate hike in June from the Federal Reserve.

If the jobs report comes in particularly strong, speculators might also be tempted to unwind significant positions that involved buying the Yen, lifting the greenback further after USDJPY reached a one-week high before a brief pullback.

Growth in Mexico's manufacturing sector gathered momentum in May, driven by an uptick in output, new orders and employment.

A survey delivered late Thursday from Markit underscored this development, with the Manufacturing PMI climbing to 51.2 from 50.7 in April after being adjusted for seasonal variations. An index reading above 50 indicates expansion, while a figure below suggests contraction.

The Mexican economy posted stronger-than-expected first quarter growth after fears that US President Donald Trump would impose tariffs on Mexican-made goods eased significantly. Close to 80.00% of the country’s exports are directed to the US, comprising mainly of manufactured goods like cars and TVs.

With the USDMXN pair reversing from a six-month low last week, the pair is currently stuck within a narrow trading range above short-term support at 18.5500.