Forex Today: Tensions rise ahead of Nonfarm Payrolls, fall in Washington, USD holds gains

Yohay Elam FXStreet

Here is what you need to know on Friday, November 8:

The US dollar is holding onto its gains, as bond yields remain elevated. Markets focus on the US jobs report for December, which could be negative. President Trump sent a calming message denouncing the Capitol chaos, potentially defusing tensions. Canada's labor figures and Bitcoin's ascent to near $40K are also eyed.

US Treasury yields have been extending their gains, trading near 1.10%. The move followed Democrats' win of the Senate, which would enable passing massive stimulus and raising American debt. Details about President-elect Joe Biden's economic plans are set to emerge.

Is King Dollar ready for a comeback? Looking at the blue wave, Capitol chaos and the Fed

Gold remains on the back foot, trading closer to $1,900 as returns on US Treasuries remain elevated.

Capitol chaos: President Donald Trump made a sharp U-turn, denouncing the rioters who stormed the Capitol and temporarily delayed the certification of Biden's win. He also promised to help in the transition to a new administration. Several cabinet members resigned and Democrats called for impeaching Trump, despite the short time he has in office. Investors are shrugging off the political drama.

The final Nonfarm Payrolls report of 2020 is set to show a modest gain of 71,000 jobs amid the winter wave of the virus. Indicators leading to the publication have been mixed, with ISM's Purchasing Managers' Indexes painting an upbeat picture while ADP's private-sector figures falling short of estimates.

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Canada releases its labor statistics at the same time and economists expect a loss of jobs and an increase in the Unemployment Rate. USD/CAD has been trading below 1.27 amid the rise in oil prices earlier this week. The black gold benefitted from Saudi Arabia's unilateral production cut.

Canadian Jobs Preview: Expectations for job losses may result in a loonie rally

Coronavirus continues raging in the US and Europe. America's daily death toll is at around 4,000 and hospitalizations are above 130,000. UK Prime Minister Boris Johnson announced a ramp-up of its vaccination campaign.

Israel, the world's leader in immunization, aims to vaccinate all adults by the end of March. According to Pfizer, its inoculation is able to cope with both the British and South African variants of COVID-19.

Bitcoin has been extending its gains, nearly hitting the $40,000 mark. Ethereum is at around $1,200.

Five factors moving the US dollar in 2021 and not necessarily to the downside

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

AUD/USD consolidates above 0.6950 amid risk aversion

AUD/USD consolidates in the Asian session on Thursday, trading just above 0.6950 as traders assess developments in the Middle East crisis. The Pentagon reportedly ordered readiness for potential strikes against Iran. This keeps the geopolitical risk premium in play, which, along with hawkish FOMC Minutes and elevated US bond yields, will likely keep the US Dollar underpinned at the expense of the pair.

USD/JPY slips below 158.00 as USD retreats

USD/JPY returns to the red below 158.00 in the Asian session on Thursday amid speculation that authorities will step in to prop up the Japanese Yen. Meanwhile, the US Dollar eases from near an 18-month high on profit taking, ignoring Wednesday's hawkish FOMC Minutes and the risk of a further escalation of tensions in the Middle East, adding to the pair's pullback.

Gold bulls remain on the sidelines as hawkish Fed and Middle East jitters underpin USD

Gold trims its intraday gains and trades near $4,125 during the early European session on Thursday, up around 0.35% for the day. A combination of factors helps the US Dollar retain a bullish undertone, which keeps a lid on the precious metal's bounce from a two-month low, touched the previous day.

Ripple and Stellar test key support amid rising downside risks

Ripple (XRP) and Stellar (XLM) remain under pressure and extend their corrections on Thursday as weakening derivatives metrics and broader macroeconomic headwinds weigh on sentiment. XRP and XLM approach a key support zone after three consecutive days of losses so far this week.

The UK 30-year gilt just hit a 1998 high. Is that good or bad for the British Pound?

The yield on the UK's 30-year government bond, or gilt, went through 6% on October 1 for the first time since early 1998, and on Monday the Pound was at its strongest against the Euro since June 2025. The gilt market's 28-year high is mostly someone else's. Since early May, the 30-year gilt yield has risen about 0.15 of a percentage point and the US 30-year about 0.7.