NFPs on Watch
USD has been a little higher today ahead of the US payrolls report. The market is looking for 160k on the headline figure, up from the prior month’s 75k along with the unemployment rate to stay unchanged at 3.6%. The consensus is also for a small uptick in average hourly earnings to 3.2% from 3.1% prior. USD index trades 96.51 last as price inches its way back towards the 97.10 level.
Euro Lower on USD Rally
EURUSD remains under pressure today as the rally in USD weighs on sentiment. Eurozone retail sales came in weaker than expected yesterday, once again highlighting the difficulties facing the ECB and likelihood of easing in the coming months. EURUSD trades 1.1262 last as price slides back towards the 1.1217 level. US employment reports later today could provide the fuel for a sharp drop if we see surprises to the upside.
Pound Still Down
GBPUSD trades with a heavy tone this morning following a sharp drop overnight. Price is now sitting back just below the 1.2559 level as the USD rally keeps price pressured. GBP remains blighted by Brexit uncertainty and political disruption on the domestic front which are both likely to keep price trading lower in the near term.
SPX500 Ends Near Highs
Risk assets have traded lower so far today, as a resurgent US dollar takes the shine out of an otherwise solid week. SPX500 traded up to fresh all-time highs this week, sitting just off them now at 2990.93 last. The prospect of a renewed effort to deliver a US/China trade deal is keeping price well supported. However, China’s demand that the US must remove all tariffs as a condition for agreeing on a deal is causing some uncertainty, weighing on equity prices here.
Safe Havens Down Despite Equities Dip
Safe havens have been softer over the final European session of the week also. Despite the moves lower in equities prices, both gold and JPY have been lower today in light of the USD rally. USDJPY trades 108.02 last, with price continuing to recover off the 107.55 level support. XAUUSD trades 1414.38 last as the retracement lower from the 1424.59 level continues.
Crude Capped Despite OPEC Extension
Oil prices have traded lower today also as the latest bullish report from the EIA has failed to keep price supported. Earlier in the week, OPEC announced an extension to the current production cuts which will continue for a further nine months. Despite the news, crude has remained weighed to the downside trading 56.64 last, though still sits above the 55.86 for now.
Commodity Currencies Weak Into Weekend
USDCAD has recovered some of its recent losses over the European morning today. However, for now, it remains below the 1.3070 support level. Weakness in oil prices, as well as a resurgent US dollar, are keeping USDCAD supported. US and Canadian employment reports due later hold the potential to cause late volatility.
AUDUSD has been a little lower over the European morning on Friday though ends the week above the .70 level, which is an important technical development. Despite RBA rate cuts and expectations of further cuts to come, AUD is being supported by hopes around a potential US/China trade deal.