Forex Today: US Dollar retreats alongside yields, Canada jobs report coming up

Eren Sengezer FXStreet

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

The positive shift seen in risk sentiment early Friday makes it difficult for the US Dollar (USD) to extend its weekly rally. In the meantime, the 10-year US Treasury bond yield continues to edge lower toward 4.2% after snapping a four-day winning streak on Thursday. The August jobs report from Canada will be watched closely by market participants in the early American session. July Wholesale Inventories and Consumer Credit Change will be featured in the US economic docket ahead of the weekend.

The USD Index (DXY) touched a fresh multi-month high of 105.15 on Thursday after the data from the US showed that the weekly Initial Jobless Claims declined to 216,000 in the week ending September 2 from 229,000. Meanwhile, the Bureau of Labor Statistics revised the second-quarter Unit Labor Costs to +2.2% from +1.6% in the initial estimate. Early Friday, DXY stays in negative territory below 105.00 and US stock index futures trade in positive territory, pointing to an improving risk mood.

US Dollar price this week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Pound Sterling.

	USD	EUR	GBP	CAD	AUD	JPY	NZD	CHF
USD		0.55%	0.84%	0.50%	0.84%	0.78%	0.63%	0.57%
EUR	-0.57%		0.28%	-0.06%	0.31%	0.24%	0.06%	-0.02%
GBP	-0.84%	-0.29%		-0.35%	0.01%	-0.05%	-0.21%	-0.29%
CAD	-0.51%	0.06%	0.35%		0.36%	0.30%	0.14%	0.08%
AUD	-0.86%	-0.29%	0.00%	-0.34%		-0.06%	-0.22%	-0.28%
JPY	-0.79%	-0.25%	0.06%	-0.31%	0.08%		-0.17%	-0.21%
NZD	-0.65%	-0.06%	0.21%	-0.13%	0.22%	0.15%		-0.06%
CHF	-0.57%	-0.03%	0.25%	-0.08%	0.27%	0.21%	0.05%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

USD/CAD climbed to its strongest level since late March near 1.3700 on Thursday but staged a downward correction in the Asian session on Friday. While delivering the Economic Progress Report late Thursday, Bank of Canada Governor Tiff Macklem noted that policymakers are still concerned about the persistence of underlying inflation, even though the monetary policy may be sufficiently restrictive to restore price stability. "Inflation is still too high, and there is little downward momentum in underlying inflation," Macklem noted. Unemployment in Canada is forecast to tick up to 5.6% in August from 5.5% in July.

Canada Jobs Report Preview: Unemployment rate set to edge up.

The data from Japan showed early Friday that the real Gross Domestic Product (GDP) grew at an annual rate of 3.5% in the second quarter. Meanwhile, Japanese Finance Minister Shunichi Suzuki repeated that they won't rule out any options against excessive FX moves. After posting small losses on Thursday, USD/JPY remained under modest bearish pressure in the Asian session and was last seen trading in negative territory at around 147.00 early Friday.

EUR/USD dropped below 1.0700 for the first time in three months on Thursday but recovered above that level early Friday. Germany's Destatis left the August Consumer Price Index (CPI) reading unchanged at 6.1% on a yearly basis.

GBP/USD gained traction and rose above 1.2500 in the Asian trading hours on Friday after posting large losses in previous three days. The pair, however, struggled to extend its rebound in the European morning and erased some of its daily gains.

Gold price posted small gains on Thursday despite the persistent USD strength. Retreating yields help XAU/USD hold its ground early Friday and the pair was last seen trading at around $1,925.

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 remains on the back foot near 1.1740 post-US PMIs

EUR/USD is edging lower on Friday, giving back part of Thursday’s sharp rebound and drifting back toward the 1.1740 area amid the lack of clear direction around the US Dollar, which remains apathetic following the lower-than-expected results from flash PMIs in January.

GBP/USD keeps the firm tone around 1.3530

GBP/USD is building on its solid weekly advance and is pushing toward the 1.3530 area, or two-week highs, on the back of a modest retracement in the Greenback. In the meantime, strong UK retail sales figures and upbeat preliminary PMIs are reinforcing Cable’s gains as Friday’s session unfolds.

Gold trims gains, back to $4,950

Gold prices surged to a fresh record near $4,970 per troy ounce earlier on Friday, keeping the door open for a potential test of the $5,000 mark sooner rather than later. Mixed price action in the US Dollar, alongside falling Treasury yields across the curve, is underpinning the precious metal’s rally into the end of the week.