October 9, 2021

USD Falls Ahead of NFP! What Will This Be?

 The market moved calmly towards the weekend, with the king of the USD starting to show a decline ahead of the publication of US NFP jobs in the New York session.

The U.S. Senate’s agreement in passing a bill to raise the debt ceiling by $ 480 billion by early December, has provided temporary support for major currency trading to increase.

However, the increase recorded was insignificant as investors also took a cautious approach before the US NFP was released.

During the European session, the dollar index traded slightly lower at around 94.15, not far from a one -year high against a basket of major currencies.

As the NFP is expected to be recorded stronger, this decline is likely due to investors seeing an opportunity to make a profit by releasing their holdings of the currency first, before getting it at a lower price.

However, investors need to remain vigilant if the unexpected happens.

While commodity currencies, the Aussie dollar and the kiwi have started to reduce their gains in the previous session by trading slightly lower against the US dollar.

The euro, meanwhile, gained little to bounce back from a 14 -month low it reached on Wednesday, trading at around 1.156600 against the greenback.

The pound traded steady at 1.36100 against the USD, with support from a statement by the Bank of England (BOE) chief economist Huw Pill saying inflationary pressures proved to be heavier than initially expected, strengthening hopes for a rate hike as soon as February 2021.