Forex Today: Post-NFP USD correction extends, ECB Draghi in spotlight

Dhwani Mehta FXStreet

Mixed sentiment prevailed in Asia, as the Asian traders digested Friday’s US jobs report and resorted to fresh USD selling across the board, further fueling the correction in the USD index. As a result, the Aussie gained the most in the Asian session alongside safe-havens such as the Yen, Swiss franc and gold.

Attention now turns towards a Big Week ahead, with plenty of risk events in stored for the markets, including the central banks’ policy decisions – FOMC, BOJ, BOE and SNB and speculations surrounding Article 50 trigger. Also, a host of key economic data from across the globe will be closely eyed. Meanwhile, the day ahead holds the ECB President Draghi’s speech and US Labour Market Conditions Index m/m (LMCI) data.

Main topics in Asia

Mnuchin to communicate zero tolerance policy against currency devaluation

As per Bloomberg report, US Treasury Secretary Mnuchin, in his debut appearance at G-20, is all set to talk about the zero tolerance policy against currency devaluation.

Australia’s Morrison: Biggest worry about economy is low wage growth

The Australian Treasurer Scott Morrison crossed the wires last minutes, speaking in a Bloomberg TV interview.

Sources: Wrong for markets to start factoring in an early BOJ rate hike - RTRS

Reuters quotes sources familiar with the BOJ's thinking, noting that is expected to keep monetary policy steady on Thursday and stress that inflation is nowhere near levels that justify talk of withdrawing massive stimulus.

Goldman Sachs upgrades China equities to Overweight

Strategists at Goldman Sachs are more bullish on the Chinese equity markets, and raise their outlook on the Chinese equities to Overweight in its latest report.

Key focus for the week ahead

Fed can hike this week - Nomura

Analysts at Nomura explained that they expect the FOMC to increase the federal funds target to 0.75-1.00% at the conclusion of their next meeting.

EUR/USD sits at monthly highs above 1.0700, ECB Draghi eyed

Later today, the major will continue to get influenced by the USD dynamics ahead of the ECB Draghi’s speech and US Labor market conditions data.

A correction in the dollar has begun - BBH

Analysts at Brown Brothers Harriman explained that bringing forward expectations of a Fed hike from May-June to March was worth something for the dollar, but to get more now, the market may need to recognize the risk of three (or more) hikes this year.

Emerging Markets: Preview of the Week Ahead

EM FX ended last week on a firm note despite the strong US jobs data, with the dollar succumbing to some “buy the rumor, sell the fact” price action.

GMT	Event	Consensus	Previous
Sunday, Mar 12
n/a	USD Daylight Saving Time
Monday, Mar 13
13:30	EUR ECB President Draghi's Speech
15:00	USD Labor Market Conditions Index		1.3
16:30	USD 3-Month Bill Auction		0.745%
16:30	USD 6-Month Bill Auction		0.835%
Tuesday, Mar 14
10:00	USD NFIB Business Optimism Index		105.9
n/a	GBP 10-y Bond Auction		1.18%
10:00	EUR Industrial Production s.a. (MoM)	1.5%	-1.6%
10:00	EUR Industrial Production w.d.a. (YoY)	1.1%	2.0%
10:00	EUR ZEW Survey - Economic Sentiment		17.1
12:30	USD Producer Price Index ex Food & Energy (YoY)		1.2%
12:30	USD Producer Price Index ex Food & Energy (MoM)	0.2%	0.4%
12:30	USD Producer Price Index (YoY)		1.6%
12:30	USD Producer Price Index (MoM)	0.1%	0.6%
12:55	USD Redbook index (MoM)		-0.8%
12:55	USD Redbook index (YoY)		1%

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD weakens as US jobs data trims Fed rate cut bets

The EUR/USD pair trades in negative territory for the third consecutive day near 1.1860 during the early European session on Thursday. Traders will keep an eye on the US weekly Initial Jobless Claims data. On Friday, the attention will shift to the US Consumer Price Index inflation report.

GBP/USD bullish outlook prevails above 1.3600, UK GDP data looms

The GBP/USD pair gains ground near 1.3635, snapping the two-day losing streak during the early European session on Thursday. The preliminary reading of UK Gross Domestic Product for the fourth quarter will be closely watched later on Thursday. The UK economy is estimated to grow 0.2% QoQ in Q4, versus 0.1% in Q1.

Gold remains on the defensive below two-week top; lacks bearish conviction amid mixed cues

Gold sticks to modest intraday losses through the Asian session on Thursday, though it lacks follow-through selling and remains close to a nearly two-week high, touched the previous day. The commodity currently trades above the $5,070 level, down just over 0.20% for the day, amid mixed cues.

UK GDP set to post weak growth as markets rise bets on March rate cut

Markets will be watching closely on Thursday, when the United Kingdom’s Office for National Statistics will release the advance estimate of Q4 Gross Domestic Product. If the data land in line with consensus, the UK economy would have continued to grow at an annualised pace of 1.2%, compared with 1.3% recorded the previous year.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.