Forex Today: Stocks' strength, dollar downing face Non-Farm Payrolls test as Trump endorses masks


Here is what you need to know on Thursday, July 2:

Stocks are bid and the dollar is down amid new hopes for a coronavirus vaccine and mixed data leading to Thursday's all-important Non-Farm Payrolls. Investors are shrugging off record US infections and re-closing in several states. 

The US jobs report for June is due on Thursday due to Friday's Independence Day holiday. An increase of around three million jobs is on the cards for June after around 2.5 million in May, extending the recovery after losing approximately 20 million in April. The unemployment rate is set to drop from 13.3% to 12.3%.

See: US Non-Farm Payrolls June Preview: The delicate art of prediction

The rapid nature of developments around the current crisis and classification errors result in a wide range of outcomes possible. Wage growth will likely remain elevated as mostly low-earning workers lost their positions. The surveys were taken in the week ending June 12. 

Data leading toward the NFP were mixed. ADP's private-sector labor market figures missed expectations while the ISM Manufacturing Purchasing Managers' Index showed a return to growth. 

US COVID-19 new daily infections have topped 50,000 for the first time, with several states slapping new restrictions and others – such as New York – delaying the reopening measures. Intensive Care Units surpassed 100% normal capacity and some facilities in Miami are also struggling. 

Face masks: President Donald Trump has finally endorsed wearing masks, saying he would wear one. The president is following Republican governors that are pushing for using the basic means of protection. Goldman Sachs estimated that they would boost Gross Domestic Product by 5%. 

Coronavirus vaccine: One of the market boosters on Wednesday came from new hopes for immunization. Pfizer and BioNTech said their initial trial in discovering a vaccine was successful, and that it is ramping up efforts. Several countries are upset with America's stockpiling of Remdesivir, a medication that helps COVID-19 patients recover. 

The Federal Reserve's meeting minutes reiterated the bank's commitment to buying bonds and supporting the economy but rejected Yield Curve Control or negative interest rates. Equities remained bid after the publication but Treasury yields have advanced. 

Gold retreated from its attempts to top $1,800 seen earlier in the week. The precious metal is set to move in response to the Non-Farm Payrolls.

EUR/USD is trading above 1.1250, rising amid the dollar's weakness, marginally better PMIs, and the upbeat coronavirus situation in the old continent. Europe extended its reopening to foreign visitors on Wednesday. Eurozone unemployment rate is due out on Thursday. 

GBP/USD bounced from the lows, extending their end-of-quarter bounce and despite Brexit and coronavirus uncertainty. 

AUD/USD is trading above 0.69, benefiting from the upbeat market mood and despite a smaller than expected trade balance surplus in Australia. Other commodity currencies are also on the rise. WTI Oil continues holding onto the highs around $40.

Hong Kong: The controversial Chinese security law was applied for the first time on Wednesday, prompting anger around the world. The UK may open the door to allowing immigration of millions of people from the city-state an the US proceeding with sanctions. However, HK's financial market is working as usual with money flowing into the financial hub. 

Cryptocurrencies: Bitcoin has been edging higher, trading above $9,200. 

More The US will be in full-blown crisis by September regardless of a new wave

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