Forex Today: Dollar creeps higher as focus shifts to November Nonfarm Payrolls

Eren Sengezer FXStreet

Here is what you need to know on Friday, December 3:

The US Dollar Index closed the second straight day modestly higher on Thursday and holds its ground early Friday as investors gear up for the November jobs report from the US. Investors expect Nonfarm Payrolls to rise by 550,000 following October's increase of 531,000. October Retail Sales data for the euro area, Canadian employment figures and the ISM Services PMI survey from the US will be featured in the economic docket as well.

Risk flows dominated the financial markets on Thursday and Wall Street's main indexes managed to register impressive gains. The US Senate has voted to approve the bill to avert a government shutdown over the weekend. Meanwhile, Bloomberg reported that a recently conducted research in the UK found that most of the booster shots were able to increase the antibodies against the Omicron variant. Moreover, GlaxoSmithKline said Its COVID-19 antibody drug, Sotrovimab, was likely effective against the new variant.

US stocks futures are trading flat in the early European session and the 10-year US Treasury bond yield is moving sideways near 1.44% after rising nearly 3% on Thursday. In an interview with the Financial Times, Cleveland Fed President Loretta Mester noted that the economy was better at dealing with new coronavirus variants.

EUR/USD has retreated to 1.1300 area with the greenback preserving its strength ahead of the weekend.

GBP/USD managed to close in the positive territory on Thursday but seems to be having a difficult time pulling away from 1.3300 early Friday.

USD/JPY continues to edge higher above 113.00 on improving market sentiment but the pair's upside remains limited with US T-bond yields losing traction.

USD/CAD is edging lower toward 1.2800 as crude oil prices stage a rebound following a sharp decline witnessed on OPEC+ decision to go ahead with their original plan to increase the oil output by 400,000 barrels per day in January.

Gold slumped to its weakest level in a year at $1,761 on Thursday but recovered above $1,770 early Friday. The yellow metal continues to have a hard time finding demand when risk flows dominate the financial markets.

Cryptocurrencies: Bitcoin is moving up and down in a narrow channel above $55,000. Ethereum closed the previous two trading days in the negative territory and seems to have gone into a consolidation phase around $4,500.

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 deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.