Dollar strengthens ahead of US non-farm Payrolls data
- The dollar extends gains on Friday ahead of the December's US Non-farm Payrolls data that is expected to rise to 175K from a previous 39K. On Thursday, the dollar edged higher against major currencies after data showed Initial Jobless claims rose more than expected in December disappointing the markets which raised demand for the safe haven dollar. The greenback strengthened significantly this week supported by data showing a sustained US economic growth but eyes turn on today's non-farm payrolls and a speech by the Fed Chairman Ben Bernanke that will give a clearer insight.
- The euro slid to a five-week low against the US dollar today weighed by continuing euro zone debt problems and growing fears of a euro zone debt contagion. Spreads widened between euro zone peripheral countries and benchmark German debt further weighing on the single currency. EUR/USD fell 3.5% in the last three days falling as low as 1.2968 breaking below the 1.30 level and the pair was last traded at 1.2991 dollars.
- Against the Japanese Yen, the stronger dollar rallied to a two and a half week high at 83.55 on rumors saying Japan's credit rating will be downgraded and on expectations the US Treasury yields will widen. The greenback gained more than 2% in the last three days edging higher than the September 15th level when Japan intervened to stop the Yen from rising.
- The Australian dollar continue its slump against the US dollar today weighed by a stronger dollar and continuing massive floods in Queensland that hurt coal exports. The Aussie fell to 0.9918 from 1.0212 above parity traded in the begging of the week.
- Gold edged lower today extending losses and falling as low as 1365.63 dollars an ounce as a stronger dollar makes the precious metal more expensive for investors outside the United States
Currency to watch out for: EURUSD & USDJPY
- § The EURUSD pivot point is at 1.3060 with a preference to enter into Short positions at 1.3050
- § The USDJPY pivot point is at 83.15 with a preference to enter Long positions at 83.20
Today's calendar and market movers:
- § Europe's Gross Domestic Product QoQ is forecasted to gain 0.4%
- § US Non-farm Payrolls in December is forecasted to rise to 135K
- § Canada's Net Change in Employment in December is forecasted to rise to 20K
US equities closed negative on Thursday with the S&P500 traded down -0.21% and the DJIA down -0.22%. The European bourses are mixed with the FTSE trading down -0.40%, the DAX trading up 0.60% and the CAC unchanged. The NIKKEI and the HSI at the time of writing are trading up 0.11% and up 0.09% respectively.
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