Forex Today: Quiet start to the week ahead of key data releases

Eren Sengezer FXStreet

Here is what you need to know on Monday, October 11:

The dollar weakness following the disappointing September US jobs report, which showed that Nonfarm Payrolls rose by 194,000 to miss the market expectation of 500,000 by a large margin, remained short-lived. Surging US Treasury bond yields provided support to the greenback and helped it remain resilient against its rivals.

NFP Quick Analysis: Three reasons for dollar bears to party, even if tapering remains intact.

There won't be any high-tier macroeconomic data releases on Monday. The US bond markets will be closed due to Columbus Day but stock markets will operate during normal hours. Nevertheless, the trading action is expected to remain subdued ahead of Wednesday's US inflation data.

Wall Street: US stock futures trade flat on Monday, mirroring a neutral market mood.

Week Ahead on Wall Street (SPY) (QQQ): No jobs, no taper, no rally. Can earnings change things?

USD/JPY: USD/JPY extended last week's rally, which was fueled by the 10-year US T-bond yield's advance to multi-month highs above 1.6%, and reached its strongest level since December 2018 at 112.75. Moreover, the Nikkei 225's impressive more-than-1.5% increase on Monday seems to be putting additional weight on the safe-haven JPY's shoulders.

Gold: Following a sharp upsurge to a fresh two-week high of $1,781 in the early American session on Friday, gold ended up closing the week with small losses at $1,757. Currently, XAU/USD is fluctuating in a tight channel above $1,750.

EUR/USD: The EUR/USD pair registered losses for the fifth straight week and stays relatively quiet below 1.1600 at the start of the week.

GBP/USD: British pound is edging higher in the early European session on Monday and the GBP/USD pair was last seen trading at its highest level since late September at 1.3658. September labour market data from the UK could be the next major catalyst on Tuesday.

AUD/USD: Supported by rising copper prices, the AUD/USD pair opened on a firm footing and closes in on the multi-week high it set at 0.7340 on Friday.

Oil: The barrel of West Texas Intermediate is trading above $80 for the first time since November 2014 after reports suggesting that OPEC+ will refrain from ramping up its oil output.

Cryptocurrencies: Following a quiet weekend, Bitcoin regained its traction and renewed five-month highs above $56,000. Ethereum is up more than 3% on a daily basis and is trading around $3,500.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD accelerates losses, focus is on 1.1800

EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.

GBP/USD turns negative near 1.3540

GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold picks pace, flirts with $5,000

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and pushing higher towards the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.