Forex Today: US dollar meltdown continues, focus on UK jobs data

Omkar Godbole FXStreet Contributor

The American dollar finds no love despite oversold technical conditions and slipped to a three-year low below 90.00 levels in Asia. USD/JPY reportedly ran through stops on USD longs placed below 110.00, thus leading to a broad-based sell-off in the greenback. Also, USD bears are salivating at the idea of Sino-US trade row escalating to a full-fledged trade war. The list of dollar-negative developments doesn't end there... even the treasury yields are looking heavy now. For instance, the 10-year yield is trading dead flat at 2.62 percent, having declined from the 42-month high of 2.66 percent in the last two days.

What's brewing in the majors?

EUR/USD - The common currency remained bid above 1.23 in Asia, courtesy of yesterday's solid Eurozone consumer confidence number. The drop in USD/JPY below 100.00 levels gave an additional boost to the common currency, pushing it to a fresh three-year high of 1.2335. Further rally towards 1.2376 (127.2% Fib extension of the Nov low - Nov high - Dec low) could be seen if the Eurozone and German preliminary PMI numbers beat estimates and show an uptick in input and output costs. That said, the bulls still need to observe caution as ECB's Draghi (tomorrow) will likely reiterate central bank's resolve to keep monetary policy accommodative.

GBP/USD - hit a fresh post-Brexit vote high of 1.4049. Progress on Brexit front, upbeat UK CBI total trends survey and an improvement in public finances in December seems to have put a bid under the British Pound. Having rallied more than 500 pips since Jan. 11, Cable looks overbought as per the daily RSI. However, strong UK wage growth numbers (due today) could still push GBP/USD higher to 1.41 and beyond. On the other hand, the dismal wage growth figure could yield much awaited technical correction.

UK jobs preview - HSBC

USD/JPY - The spot clocked a 19-week low of 109.80 and was last seen trading at weekly 100-MA level of 109.88. A slightly hawkish BOJ and fears of an all-out trade war between the US and China could keep the Yen well bid. Technicals continue to favor a near-term drop to 107.60.

Major news

Japan Flash Manufacturing PMI - Output rises at the quickest rate in 47 months.

Japan exports rose 9.3 percent year-on-year in December.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD stuck as the RBA talks tough into a slowdown

The Australian Dollar is going nowhere in a hurry, and the contradiction at its core explains why. The Reserve Bank of Australia keeps dangling the prospect of another hike, yet the economy it governs just expanded 0.3% in the first quarter, a clear step down from the prior pace. A central bank threatening to tighten into a visible slowdown is not a recipe for conviction in either direction, and the tape shows it.

USD/JPY: Japanese Yen coiled at the line, leaning on everyone but Japan

The Yen is doing very little, and that stasis is the whole story. USD/JPY sits glued near 160.00 not because Japan has found new strength, but because two outside forces are fighting to a draw over it: a US rate complex that keeps the dollar bid, and a Ministry of Finance that refuses to let the line break.

Gold declines below $4,500 on stalled US-Iran ceasefire talks, US NFP data looms

Gold price edges lower to near $4,470 during the early Asian session on Friday. The precious metal remains volatile amid ongoing geopolitical turmoil. Traders will closely monitor the developments surrounding the US-Iran peace deal and the US May employment report later on Friday.

Bitcoin falls below $64K as demand turns negative, short-term holders' selling intensifies

Bitcoin has fallen below $64,000 on Thursday amid weakening market demand and mounting selling pressure from short-term holders. The leading cryptocurrency slipped toward the $63,000 level amid a broader risk-off environment, with several key metrics signaling one of the most challenging periods of the current market cycle.

Nonfarm payrolls: Testing the limits of Fed policy patience

The upcoming nonfarm payrolls report for May will provide the final update on the US labor market before Kevin Warsh attends his first policy meeting as the new Fed Chair later this month.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.