News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bullish
Wall Street
Mixed
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Canadian #Dollar Outlook: $USDCAD BoC Breakdown– #Loonie Levels - https://t.co/3SVBLyMZTI https://t.co/9SzmpyXplC
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: US 500: 1.39% Wall Street: 0.76% FTSE 100: 0.18% Germany 30: 0.15% France 40: 0.15% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/zBiMtLXZXw
  • US indices remain up following Biden's inauguration, with the S&P and Nasdaq hitting fresh all time highs today. DOW +0.76% NDX +1.83% SPX +1.33% RUT +0.12% $DOW $QQQ $SPY $IWM
  • USD/CAD falls to session lows as Loonie gains immediately after the BoC rate decision. Get your $USDCAD market update from @RichDvorakFX here:https://t.co/4s6kKsljCm https://t.co/FTdgwIL8cF
  • $EURJPY is trading below 125.50 today after attempting to stage a recovery yesterday. The pair had climbed back above 126.00 yesterday after falling to around 125.10, its lowest level since early December, during Monday trading. $EUR $JPY https://t.co/4mWhO9rIzA
  • US Senator Romney: Not looking for new stimulus in the immediate future. $SPY $USD
  • Mexican #Peso Outlook: $USDMXN Breakdown to Nine-month Lows - https://t.co/UTCfdRYIwU https://t.co/tS0ywWWKcA
  • BoE Governor Bailey: - Transmission of policy at zero or negative rates is much less clear - Evidence suggests impact of negative rates isn't straightforward but they can work - Sensible to have negative rates in the toolbox $GBP
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 100.00%, while traders in Wall Street are at opposite extremes with 64.46%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/8fbdMWLAOt
  • BoE Governor Bailey: - No decision has been made on negative rates - BoE has not discussed whether or not to introduce negative rates $GBP
Preview for December US NFPs and Implications for USDOLLAR

Preview for December US NFPs and Implications for USDOLLAR

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- EUR/USD stuck to $1.0800/50 zone.

- Chinese equities rebound after circuit breaker is removed - which makes perfect sense.

- Too strong of a print, and USD/JPY likely puts in a doji for the day.

It's the last US labor market report of 2016, and there are still a few nagging questions on investors' minds worldwide:

- As the US labor market recovery matures and the Fed lifts off, will jobs growth hold firm or sag?

- Are recent gains in employment sufficient to continue to push down the US unemployment rate or has the US economy already reached "full employment?"

- Is wage growth accelerating enough to give the Fed confidence in a later rebound in inflation?

We'll at least have a partial answer to these questions, with the release of the December US Nonfarm Payrolls report today at 13:30 GMT. Current expectations are fairly strong, with the Unemployment Rate expected to hold at 5.0%, and the headline jobs figure to come in at +200K. These expectations in context of the projected path of rate hikes this year are rather important.

Given recent commentary from Fed officials, the US Dollar may not need a blowout print (>250K) here in order for future rate expectations to firm up; currently, only two 25-bps rate hikes are being priced in next year, per the Fed Futures contract. Of course, the Fed sees four rate hikes, so someone is wrong. If the print is strong enough, it will force the market to recalibrate its expectations, proving to be a renewed bullish catalyst for the US Dollar.

For equities, the 'sweet spots' would be in the 150-175K range or above 250K. In the first scenario, investors would likely feel that the Fed would reduce its hawkish tone and suggest a more gradual path going forward. In the second scenario, investors could find relief that the US economy is still chugging along and shrugging off the marginally higher benchmark rate.

In the event that the FOMC meeting and the US NFPs prove to be supportive of the US Dollar - a 'goldilocks' report, if you will - it will likely come at the detriment of higher yielding currencies and risk-correlated assets. Any signs that the Fed could tighten policy faster than currently expected, against a backdrop of rising tensions between Iran and Saudi Arabia as well as Chinese/EM growth concerns, would seem like a caustic mix of influences for the commodity currency bloc in particular.

Read more: Preview for ECB Meeting and Outlook for EUR/USD, EUR/JPY

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES