The dollar continues the bearish correction

On Thursday, USD weakness continued, which allowed the Dollar Index to fall more setting new mid-term lows. We were still digesting dovish Powell from Wednesday but also got fresh data from the US. Both, PCE Price Index and ISM Manufacturing PMI came worse than expected. Interestingly the latter one came below 50 for the first time since June 2020.

Today’s calendar is packed. We already had speeches from three top central bankers: Kuroda from BoJ, Lowe from RBA, and Orr from RBNZ. Lowe said that “Inflation expectations in remain well anchored” and that “The Reserve Bank of Australia is attempting to slow inflation without too much negative impact on the economy.” AUD is currently trading higher.

The real treat today will be NFP and the accompanying pack of data from the American and Canadian job market. Experts are expecting a mediocre number of 200K jobs created, which would be a drop from the previous month’s print of 261K. An even bigger drop is expected in Canada, where only a 10.5K number is expected, which would be a huge drop from the 108.3K reported before.

Indices corrected yesterday, which should not be surprising especially since the correction was not big. Interesting moves happened yesterday on the metals, which largely outperformed the market. Silver rose almost 5%, Palladium climbed 4.3% higher and Gold rose 3.15%. That stands in contrast to for example Oil, which started Thursday on the front foot but at the end of the day gave back almost all the prior gains.

On the Forex market, we had a significant drop in the USDJPY, which is clearly aiming the 131 support. GBPUSD surged and managed to set new, mid-term highs. The same goes for the NZDUSD and AUDUSD. An interesting fight is currently happening between two main European currencies: EURGBP, where the buyers are doing all they can to defend the 0.858 support, which is absolutely crucial here since September.