USD Higher Ahead of NFP
The US dollar has ended the week firmly higher as a string of better data has lifted sentiment. The ISM non-manufacturing reading came in well above expectations, followed by a stronger than expected ADP print which has fuelled expectations of a strong NFP release later today. The USD index trades 97.26 last.
EURUSD has been lower over the week, weighed on by the recovery in the US dollar. Earlier in the week, the CPI flash reading came in at 1.3% as expected, marking a 0.3% improvement on the prior month.
However, amidst the recent slew of weak data, it failed to provide any support for EURUSD which trades down at 1.1095 as of writing.
GBP Lower on Carney Comments
GBPUSD has been a little weaker over the week despite news that UK parliament has now officially approved the PM’s Withdrawal Agreement Bill, meaning the UK will leave the EU on January 31st.
However, comments from BOE Governor Carney have weighed on GBP. Carney said that an interest rate cut could still be needed as the projected rebound following Brexit was not a certainty and growth is still below potential. GBPUSD trades 1.2970 last.
SPX500 Hits New Highs
Risk assets have ended the week firmly higher as the calming of tensions between the US and Iran as met with a relief rally across the markets. The SPX500 has broken out to new all-time highs as of today, trading 3282.43.
With the US and China due to sign off on the phase one trade deal next week, equities are likely to remain supported.
JPY & Gold Lower
Safe havens have been lower today in light of the rally in equities and in the USD which has seen both JPY and gold trading lower. USDJPY trades 109.63 last, trading back up to test recent highs which now look vulnerable to breaking.
XAUUSD trades 1548.63 last, back below the 1522.75 level.
Crude Heavily Lower
Oil prices have been sharply lower into the end of the week. Following the initial upside in response to US/Iran tensions, the calming of that situation has seen price reversing lower. The EIA then added further pressure to the move, reporting an inventory surplus for the first time in four weeks. Crude trades 59.31 last.
USDCAD has been higher today, with price trading back above the 1.3068 level in response to the weakness in crude which has weighed on CAD. Along with US labour market data due later today, the market also receives the Canadian employment reports which could cause further volatility.
Aussie Ends The Week lower
AUDUSD has bee a little higher today, boosted by the general improvement in risk appetite. AUD ends the week heavily lower, however, as the market now anticipates that the RBA will be forced to cut rates in February in response to the economic damage caused by the wildfires there. AUDUSD trades .6874 last.