Week Ahead: Dollar in the crosshairs

• FXTM’s USDInd ↑ 0.8% YTD
• Iran conflict + US NFP combo = fresh volatility?
• Over past year, NFP triggered moves of ↑ 0.3% & ↓ 1.2%
• NFP forecast to trigger moves of ↑ 0.3% & ↓ 0.4%
• Technical levels: 99.50, 50-day, 200-day SMA

The first full trading week of June is packed with high-impact events.

A volley of market-moving events, the US May jobs report, the OECD economic outlook and speeches from the financial heavyweights set the stage for serious volatility.

Monday, 1st June

• AUD: Australia Melbourne Institute inflation gauge

• CNY: China RatingDog manufacturing PMI

• EUR: Eurozone S&P Global manufacturing PMI, unemployment, inflation expectations

• GBP: UK S&P Global manufacturing PMI, Nationwide house prices

•  USDInd: ISM Manufacturing, S&P Global manufacturing PMI

Tuesday, 2nd June

• EUR: Eurozone CPI

• USDInd: Minneapolis Fed President Neel Kashkari, Cleveland Fed President Beth Hammack speech

Wednesday, 3rd June

• AUD: Australia GDP

• CNY: China RatingDog services PMI

• EUR: Eurozone S&P Global services PMI, PPI

• OECD releases its latest economic outlook

• USDInd: Fed Beige Book, ISM services index, US Treasury Secretary Scott Bessent testimony

Thursday, 4th June

• EUR: Eurozone retail sales

• USDInd: US initial jobless claims, San Francisco Fed President Mary Daly speech

• GBP: BOE Governor Andrew Bailey speech

Friday, 5th June

• CAD: Canada unemployment

• EUR: Eurozone GDP

• GBP: BOE Governor Andrew Bailey speech

• USDInd: US unemployment, nonfarm payrolls

One instrument sits right at the centre of it all – FXTM’s USDInd.

Note: The USD Index tracks how the dollar is performing against a basket of six different G10 currencies, including the Euro, British Pound, Japanese Yen, and Canadian dollar.

Here is how they are weighed:

• Euro: 57.6%
• JPY: 13.6%
• GBP: 11.9%
• CAD: 9.1%
• SEK: 4.2%
• CHF: 3.6%

For weeks, the USD Index has been stuck…coiled inside a wide range, going nowhere fast.

Same story, different day.

But that range won’t hold forever with the lineup of key events potentially sparking a major move.

Here are 4 reasons why a breakout could be on the horizon:

1) US-Iran tentative deal

In a welcome development to global markets, the US and Iran have reached a tentative deal to extend a ceasefire by 60 days and launch further talks on Tehran’s nuclear program.

However, President Donald Trump has yet to agree to the terms.

Nevertheless, this marks a positive shift somewhat outweighing concerns about clashes in the Persian Gulf.

• If Trump signs of the ceasefire deal, this may raise hopes of the re-opening of the Strait of Hormuz – weakening the dollar as inflation fears cool.
• Should the tentative deal fall apart, the dollar may rally on renewed inflation concerns and geopolitical risk

2) US May NFP report

The May US jobs report on Friday 5th June may provide critical insight into the health of the labour markets.

Here’s what economists predict for this closely watched jobs report:

• Headline NFP figure: 93,000 (new jobs added to US labour market)

If so, this would be a decline from the April 115,000 headline NFP figure.

• Unemployment rate: 4.3%

If so, this would match April unemployment rate

• Average hourly earnings month-on-month (May 2026 vs. APril 2026): 0.3%

If so, this would higher than April’s figure.

Note: Other key data in the week including the ADP and Fed speeches may influence gold prices.

• A stronger-than-expected US jobs data may stimulate bets around the Fed hiking rates – boosting the USDInd.
• A weaker-than-expected figure could cool bets around Fed hikes, weakening the USDInd.

Note: Traders are currently pricing a 56% chance that the Fed will hike rates by December 2026.

3) Major central bank speakers

A host of Fed speakers and financial heavyweights will be under the spotlight in the week ahead.

Central bank heads from BoE’s Andrey Bailey, BoJ Governor Kazuo Ueda, RBA Governor Michele Bullock may share key insight into future policy moves and thoughts on inflation. This could translate into heightened volatility for the USDInd given how its weighted.

4) Technical forces

FXTM’s USDInd remains in a wide range.

• A solid breakout and daily close above 99.50 could trigger an incline towards the 100.00 and 100.67.
• Should prices break below 98.90, bears could be encouraged to hit the 200-day SMA and 97.70.