US NFP in Focus
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NFPs Up Next
The US dollar has rebounded so far over the European session on Friday. Following two days of losses on the back of the latest Fed rate cut, USD is now trading back in the green ahead of today’s US employment reports. While Fed rate-cut expectations for December have been reduced, any weakness in today’s reading will likely see USD lower. USD index trades 97.14 last.
Euro Lower on USD Recovery
EURUSD has been heavily lower over the final European morning of the week as the rebound in USD sees price falling to 1.1144 last. Despite the setback today, EURUSD ends the week higher as the US rate cut has allowed for some upside in the single currency given that the ECB has already paused its easing. News of Brexit being delayed has also helped EUR recover this week.
Brexit Hopes Boost GBP
GBPUSD ends the week higher also as optimism around Brexit keeps the UK currency afloat. The UK was due to leave the EU yesterday though following yet another Brexit extension, the UK is now due to leave the EU on January 31st, 2020. However, UK elections ahead of that hold the potential to change the course of Brexit yet again. GBPUSD trades 1.2950 last, heading back up towards the 1.3032 level.
Risk Remains Buoyant into Weekend
Risk assets have traded higher into the end of the week with the SPX500 recovering its mid-week losses. The index traded to record highs this week of 3056.43 as Trump boosted optimism around US/China trade negotiations. The US rate cut this week has boosted the outlook for equities once again with the SPX500 trading 3044.43 last, back near recent highs.
JPY & Gold Lower
Safe havens have softened a little today given the recovery in USD and equities. Both gold and JPY are a touch lower against USD as of writing. However, US employment reports today could see these moves reversed in response to any weakness. USDJPY trade 108.04 last, with price having collapsed back under the 108.78 level. XAUUSD trades 1510.01 last, with price holding above the top of the falling wedge pattern for now, keeping focus on further upside.
Crude Capped By Bearish EIA Report
Oil prices have been higher today though are ending the week in the red as yet another build in US crude stores weighs on price. The EIA reported a 5.7 million barrel surplus last week, which far exceeded analyst expectations and has once again raised concerns around the demand outlook for crude. Despite a post-FOMC lift, crude has fallen lower again now, trading 54.39 last.
CAD Weaker on BOC Outlook
USDCAD has been a little higher today as a result of a firmer USD and a weakened CAD in response to broadly lower crude prices over the week. The outlook for CAD remains bearish in the near term on the back of the BOC meeting earlier this week. The BOC kept rates unchanged though hinted at likely rate cuts coming soon as a result of weaker global conditions. USDCAD trades 1.3160 last.
AUD Still Tied To Trade Talks
AUDUSD has been lower over the session so far today with price falling back to .69. AUD did not receive the boost many were looking for in response to the latest Fed rate cut and for now, focus remains on the ongoing US/China trade talks. If the two sides can sign a deal, this should keep the Aussie supported in the medium term.