Most FX Assets Relatively Flat Ahead of NFP

There was a number of instruments that ended the session mixed yesterday. This is despite risk-on flows continuing to push the dollar lower in the early hours.

As NY opened following some relatively good ISM Non-Manufacturing and ADP numbers, sentiment shifted a tad. This allowed the US index to recover all losses and push some FX majors near their opening levels.

Meanwhile, positive trade war developments supported high-risk assets with SPX registering yet another “best-performer” session.

In today’s trade…

The greenback has been weighing on most FX majors compared to how weak it has been trading since the contractionary ISM Manufacturing PMI figures released last Tuesday. Despite this, high-risk assets were able to register marginal gains yesterday. And this is continuing into today’s trading session up to now.

Aussie, kiwi and US equities moved up. The 68 cent barrier is now past for AUDUSD, NZDUSD just tagged the 64 cents and SPX seems bid after the breakout above 2938. Equities could also well be affected by increasing expectations of another Fed cut.

Off the high-risk FX majors, Loonie ended the session unchanged on the back of oil’s reversal. This is despite EIA’s crude draw surprise. However, it is currently pushing the dollar lower. Note that the psychological $1.32 level is likely to reject USDCAD. Meanwhile, forex traders patiently await the Canadian jobs data.

Safe-Havens Under Pressure on Trade War Optimism

Despite USDJPY, USDCHF and gold being dollar de/nominated FX assets, dollar-negative flows did not affect them. Market participants perhaps found an opportunity to pocket some profits ahead of the NFP. Especially since US-Sino relations are improving.

Safe-haven demand seems to be persistently weakening this morning, with the Swiss Franc and gold feeling the most pain. Yen, on the other hand, remains muted at the 107 psychological level against the buck.

EURUSD Reversed Gains on German Data, Now Mixed

EURUSD was bid yesterday and reached a high of $1.1082. Sentiment shifted, however, after Germany reported poor Factory Orders figures not seen since April 2019. Interestingly enough, but expectedly, EURUSD ended the session mixed.

In today’s session, the most popular currency pair remains glued around yesterday’s close at $1.1030 despite the slight uptick in year-on-year employment and GDP figures.

It seems that forex traders are getting ready for the monthly NFP.

Pound Performs Worse Compared to Last Session

GBPUSD reached yet another high yesterday, breaking the $1.23 psychological resistance for good. Parliament is likely to dismiss BoJo’s strategy for a snap election as well. Following his previous failure to leave the EU with a “no-deal,” Brexit pound traders took the latest defeat as a good sign.

Into this session, however, market participants are looking into pocketing some profits ahead of major-impact releases, and as the HPI figures registered a softening. With that being said, the weakening has taken cable only marginally below $1.23.


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