Forex Today: Dollar on the loose
|What you need to take care of on Friday, September 2:
Financial markets kick-started September on the back foot as recession-related concerns were exacerbated by China announcing Chengdu, a city of roughly 21 million people, has been put on coronavirus lockdown. The American dollar surged, helped by upbeat local data and the dismal market mood.
In Europe, the focus remains on the energy crisis. The EU Commission is working on a market intervention to cap energy prices and cut electricity demand after Russia slashed gas deliveries to the Union. President Ursula Von der Leyen will speak on the matter next September 14.
Meanwhile, Russian Deputy Prime Minister Alexander Novak noted the country might increase oil production this year, supporting OPEC+ deal extension beyond 2022. At the same time, Gazprom is cutting gas provision to France, while Germany fears the company will shut down the Nord Stream 1 pipeline once again by mid-October.
The EUR/USD pair trades around 0.9950, while GBP/USD plunged to 1.1497, now trading around 1.1540. Commodity-linked currencies finished the day mixed, as AUD/USD is down to 0.6780 while USD/CAD is steady at around 1.3160. The USD/JPY pair surged to 140.22, its highest in over twenty years, now trading a handful of pips below the level.
Stocks remained under pressure, although Wall Street’s losses were moderate. The DJIA managed to post a modest intraday advance. Nevertheless, the DXY soared to a multi-year high, while government bond yields also rose.
On Friday, the focus will be on the US Nonfarm Payrolls report. The country is expected to have added 300K new jobs in August, while the Unemployment Rate is foreseen steady at 3.5%.
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