The US Dollar lost additional momentum on Thursday, primarily as the Japanese yen gained strong support following a slightly hawkish tone from the BoJ meeting, preventing the dollar from recovering any upward traction. Friday’s release of the US labour market report is expected to be pivotal for determining the Fed’s near-term rate path.
Here is what you need to know on Friday, November 1:
The US Dollar Index (DXY) deflated to multi-day lows and flirted with the critical 200-day SMA in the 103.80 region. The publication of October’s Nonfarm Payrolls will take centre stage, seconded by the final S&P Global Manufacturing PMI, the ISM Manufacturing PMI, and Construction Spending.
EUR/USD picked up further upside impulse and traded closer to the key barrier at 1.0900 the figure amidst sticky inflation figures in the bloc and shrinking bets for a jumbo rate cut by the ECB in December.
GBP/USD faced increasing selling pressure and receded to fresh two-month lows in the 1.2840 zone despite the US Dollar’s offered stance and the perceived as favourable release of the Autumn Budget on Wednesday. The Nationwide Housing Prices are due seconded by the final S&P Global Manufacturing PMI.
USD/JPY plummeted to weekly lows and retested the sub-152.00 region after the BoJ kept rates unchanged but left a potential hike on the table for later in the year. The final Jibun Bank Manufacturing PMI will be published.
AUD/USD left behind the initial weakness and advanced modestly, although another test or surpass of the 0.6600 hurdle remained elusive. The final Judo Bank Manufacturing PMI will be unveiled along with Producer Prices, Home Loans, and Investment Lending for Homes.
Prices of WTI rose markedly and managed to reclaim the key $70.00 mark per barrel and above in response to prospects for strong US demand and speculation that the OPEC+ could delay its planned oil output boost in December.
Gold prices retreated to three-day lows near $2,730 per ounce troy on the back of some profit taking, while the broader outlook is seen constructive. Silver prices followed suit and tumbled to multi-day lows near $32.50 per ounce.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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