Forex Today: Nonfarm Payrolls could mean an even more aggressive Fed

Valeria Bednarik FXStreet

What you need to know on Friday, January 7:

The greenback retained most of its post-FOMC Minutes gains, despite US data being generally disappointing. Stocks maintained the sour tone, while US government bond yields held near the multi-month highs achieved on Wednesday.

The EUR/USD pair settled around 1.1290, at the lower end of its weekly range, while GBP/USD trades at around 1.3520. The AUD/USD pair edged lower, now trading in the 0.7160 area, undermined by gold prices, as the bright metal fell to end the day at $1,788 a troy ounce. The Canadian dollar, on the other hand, appreciated against the greenback, with USD/CAD trading in the 1.2720 region, as crude oil prices surged to fresh multi-month highs. The barrel of WTI peaked at $80.11, now trading at 79.70.

US Federal Reserve officials reinforced the idea of a more aggressive Fed. St. Louis Fed President James Bullard said that the Federal Reserve could raise interest rates as soon as March, while Federal Reserve Bank of San Francisco President and FOMC member Mary Daly said that they will need to raise interest rates to keep the economy in balance.

The focus on Friday will be on the US December Nonfarm Payrolls report. The country is expected to have added 400K new jobs positions after gaining 210K in November. The unemployment rate is foreseen at 4.1%, down from 4.2% previously, although the under-employment rate is seen ticking higher, from 7.8% to 8%.

Ethereum enters support zone that will see ETH return to $4,000

Like this article? Help us with some feedback by answering this survey:

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD recovers modestly, stays below 1.1900

EUR/USD gains traction and edges higher toward 1.1900 in the second half of the day on Thursday. The US Dollar struggles to benefit from the upbeat employment data following an initial positive reaction, allowing the pair to find a foothold.

GBP/USD holds above 1.3600 after UK data dump

GBP/USD clings to moderate gains above 1.3600 following the release of the UK Q4 preliminary GDP, which showed that the UK economy expanded at an annual pave of 1% in Q4. Meanwhile, the improving risk mood causes the USD to lose interest and helps the pair edge higher.

Gold retreats from February highs, holds above $5,000

Gold corrects lower after touching a fresh February-high above $5,100 but manages to hold comfortably above $5,000. The positive shift seen in risk mood limits the safe-haven precious metal's strength, while the trading action remains choppy ahead of Friday's key US inflation data.

LayerZero Price Forecast: ZRO steadies as markets digest Zero blockchain announcement

LayerZero (ZRO) trades above $2.00 at press time on Thursday, holding steady after a 17% rebound the previous day, which aligned with the public announcement of the Zero blockchain and Cathie Wood joining the advisory board.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.