US Dollar Faces Pressure Ahead of NFP Report

Good morning, traders. As we close out the first week of December, Friday promises to be eventful, with Non-Farm Payrolls (NFP) from the US at the forefront. The NFP report is expected to rebound from last month’s disappointment, with forecasts set at 211,000. Canadian job data is also on tap, making labor markets the primary focus of the day.

Thursday was unusually quiet, thanks to a sparse macroeconomic calendar. The only notable data release was US unemployment claims, which came in higher than expected. However, the markets largely shrugged off the news.

In the currency market, the Japanese yen saw some renewed strength during the Asian session, only to weaken again as European and American traders stepped in. Meanwhile, the British pound and Swiss franc remained stable, with the pound asserting dominance for much of the session.

On the commodities front, gold and silver initially climbed higher but reversed during the latter half of the day, ending with modest losses. Oil, stuck in a prolonged sideways trend, failed to deliver any significant movement, keeping traders waiting for a breakout.

In the equities market, US indices continued their bullish momentum, led by the Nasdaq, which reached new highs after breaking above the key 21,000 mark earlier in the week. However, European indices, like the CAC 40, struggled to match the optimism seen in the US.

Friday’s calendar is packed with high-stakes data. The headline event is undoubtedly the Non-Farm Payrolls (NFP) report from the US. After last month’s subpar performance, traders are watching closely to see if today’s release can reignite confidence in the US labor market. A slight uptick in unemployment, from 4.1% to 4.2%, is also expected.

Additionally, Canada’s job data will provide further insights into North America’s economic health, with employment change expected at 24,700.

Today’s market action will largely hinge on the Non-Farm Payrolls. A strong report could reinforce bullish sentiment for the US dollar and US indices, while a disappointment might extend the dollar’s recent correction. For commodities, particularly gold and silver, the NFP could set the tone for the coming week.

Stay alert, as volatility is almost guaranteed, and good luck trading!

Source: https://www.axiory.com/analytics/market-news/us-dollar-faces-pressure-ahead-of-nfp-report