Forex Today: Wrapping up hectic week with US Nonfarm Payrolls

Eren Sengezer FXStreet

Here is what you need to know on Friday, November 5:

The dollar has gone into a consolidation phase early Friday after posting impressive gains against its major rivals on Thursday and investors still have several high-tier data releases to deal with ahead of the weekend. September Industrial Production from Germany and September Retail Sales data from the euro area will be featured in the European economic docket. In the second half of the day, the October jobs report from Canada and the United States will be watched closely by market participants.

With the dust finally settling down after the Federal Reserve's policy announcements, the greenback started to gather strength with the monetary policy divergences between major central banks becoming more apparent. The US Dollar Index, which tracks the dollar's performance against a basket of six major currencies, reached fresh multi-week highs near 94.50. Investors expect Nonfarm Payrolls to rise by 425,000 in October following the dismal print of 194,000 in September. The benchmark 10-year US Treasury bond yield erased its Fed-inspired gains but stays afloat above 1.5%. Meanwhile, the Bank of England decided to leave its policy rate unchanged at 0.1% and caused the British pound to suffer heavy losses across the board.

The S&P 500 Index hit a new all-time high on Thursday and the US stock index futures trade flat in the early European session. Later in the day, the US House of Representatives will vote on US President Joe Biden's Build Back Better Act. Meanwhile, several outlets reported that the US and China plan to reopen the consulates that were closed last year.

EUR/USD fell sharply and came within a touching distance of the 2021-low of 1.1524 on Thursday before staging a modest correction. Ahead of key data releases, the pair is moving sideways around 1.1550.

GBP/USD lost 1.3% on Thursday and registered its largest one-day loss in more than a year on its way to a fresh monthly low of 1.3470. Currently, the pair is consolidating its losses around 1.3500.

USD/CAD climbed to its highest level in more than two weeks on the back of dollar strength on Thursday. The Unemployment Rate in Canada is expected to remain unchanged at 6.9% in October with the Net Change in Employment coming in at +19.3K.

Gold capitalized on falling US Treasury bond yields and staged a decisive rebound. As of writing, XAU/USD was trading slightly below the key $1,800 level.

Cryptocurrencies: Bitcoin continues to tread water above $60,000 and Ethereum holds above $4,500.

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.

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Gold trades without a clear direction on Thursday, always below the key $4,200 mark per troy ounce. The yellow metal’s vacillating price action comes amid the marked advance in the US Dollar coupled with steady effervescence in the Middle East conflict.

Crypto Today: Bitcoin, Ethereum, XRP struggle to regain momentum amid returning ETF outflows

Bitcoin trades broadly between support at $82,500 and resistance at $85,000. Ethereum similarly remains under pressure, trading below $2,700 while the $2,600 level provides immediate support. At the same time, Ripple has slipped below the pivotal $1.50 level.

Markets are pricing a Fed pause. The jobs data says the hike is still coming

The market has rapidly changed its mind about the Fed. Only a week ago, investors saw an October interest-rate hike as the most likely outcome. However, softer inflation and cautious comments from policymakers have since turned a pause into the dominant scenario.

Markets are pricing a Fed pause. The jobs data says the hike is still coming

The market has rapidly changed its mind about the Federal Reserve (Fed). Only a week ago, investors saw an October interest-rate hike as the most likely outcome. However, softer inflation and cautious comments from policymakers have since turned a pause into the dominant scenario. Yet beneath that dramatic repricing, the US economy is sending a considerably less dovish message.