The US Dollar remains firm, and on Friday, it will attempt to defend or extend the weekly gains. During the Asian session, Japan will release Q2 GDP data. Later in the day, the highlight will be the Canadian jobs report.
Here is what you need to know on Friday, September 8:
Wall Street finished mixed, with the Dow Jones gaining 0.17% and the Nasdaq falling 0.89%. Caution still prevails in the markets. US Treasury yields jumped initially after the release of US economic data but later pulled back. The US 10-year yield settled around 4.25%.
Data released in the US on Thursday revealed a decline in Initial Jobless Claims to 216K and Continuing Claims to 1.679 million, surpassing market estimates. Following the report, the US Dollar Index reached a peak of 105.15, its highest level since March, before retracing slightly to 105.05. Economic figures bolster the "higher for longer" interest rates narrative and provide support for the US Dollar.
EUR/USD posted its lowest daily close in three months, just below 1.0700. The Euro appears vulnerable, moving with a clear downward bias and showing no signs of stabilization. The final release of Germany's Consumer Price Index is upcoming, and no surprises are anticipated. Looking ahead, the European Central Bank (ECB) will hold its monetary policy meeting next week, and there is currently no clear consensus on what actions it may take regarding interest rates.
Analysts at Danske Bank on ECB meeting:
The worsened economic outlook and markets turning more dovish, we expect the ECB to deliver a 25bp hike at the September meeting, marking a peak in the deposit rate of 4.00%. After all, the ECB has an inflation mandate rather than facilitating economic activity.
USD/JPY pulled back modestly after reaching fresh multi-month highs just below 148.00. The reversal in US yields provided support to the Japanese Yen on Thursday. Japan is set to release Q2 GDP growth data on Friday.
The British Pound registered its fifth daily decline out of the last six days, against the US Dollar. GBP/USD hit a three-month low at 1.2445, close to the 200-day Simple Moving Average (1.2425), before paring losses and rising to 1.2470.
Despite signs of stabilization in China's trade data, the Australian Dollar continues to face pressure from commodity prices and a stronger US Dollar. AUD/USD remains range-bound between 0.6360 and 0.6400, near monthly lows, with a downside bias.
The Canadian Dollar underperformed during the Americas session, despite upbeat Building Permits and Ivey PMI data. Following the Bank of Canada's decision to keep interest rates unchanged at 5%, Governor Macklem explained the decision and mentioned that there is little downward momentum in underlying inflation. USD/CAD rose to its highest level since March and is eyeing the 1.3700 area. Canada will release the August employment report on Friday.
TD Securities on Canadian jobs data:
We look for the economy to add 20k jobs in August, slightly below the 6m trend and well below levels required to keep up with population growth, with a partial rebound in construction helping to drive the headline print. A 20k print would leave the UE rate stable at 5.5%, while softer wage growth should give the report a dovish tone even if jobs print slightly above consensus.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD posts modest gains above 0.6600, investors await fresh catalysts
The AUD/USD pair posts modest gains around 0.6605 during the early Asian session on Monday. Investors await the key US economic data this week for fresh catalysts, including the Consumer Price Index, Producer Price Index, and Retail Sales.
EUR/USD: Optimism surges ahead of the United States Consumer Price Index
An uneventful week ended with some more action, as choppy trading prevailed until Thursday. EUR/USD seesawed in a tight range just above the 1.0700 threshold for most of the week, with the US Dollar finally giving up and extending its slide while heading into the weekly close.
Gold resumes rally amid fresh rate cut hopes
Spot Gold price heads into the weekly close posting solid gains and changing hands at around $2,360 a troy ounce. XAU/USD struggled for direction, spending most of the week hovering between $2,300 and $2,330.
Could Worldcoin price shoot up 45% ahead of OpenAI’s live stream on Monday?
Worldcoin price has formed a double bottom around a key support level, suggesting a potential accumulation. If the OpenAI’s Monday live stream has a positive impact on Artificial Intelligence field, it could positively impact WLD and other AI-based tokens.
Week ahead: US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.