Never miss a story from Ilya Spivak

Subscribe to recieve updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from Daily FX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Ilya Spivak

You can manage you subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

TALKING POINTS – US DOLLAR, JOBS, EURO, TARIFFS, TRADE WAR, YEN

  • US Dollar may rise on haven demand as trade war fears spook markets
  • Euro may suffer outsized losses as the EU fires back at US tariff increase
  • Japanese Yen may advance as risk aversion triggers carry trade unwind

The US Dollar traded broadly higher in Asia Pacific trade in what might have reflected pre-positioning ahead of the incoming release of May’s labor-market data. A modest pickup in job creation is expected while the unemployment rate as well as the on-year pace of wage inflation hold steady.

On balance, it would take an improbably dramatic deviation from forecasts for the release to alter the established Fed monetary policy outlook. With that in mind, the release may pass without a discrete reaction from financial markets.

Rather, the passage of event risk may open the door for sentiment trends to reassert their influence over price action. The path of least resistance seems to favor risk aversion as renewed trade war jitters unnerve investors after the US allowed to lapse steel and aluminum tariff exemptions for Canada, Mexico and the EU.

Asia Pacific shares put in a mixed performance – with the looming US jobs report probably discouraging directional commitment – but Chinese markets offered a glimpse of what may be ahead. The Shanghai Composite index plunged, reflecting how assets immediately impacted by US protectionism might fare.

The Australian Dollar followed China’s bourses downward. That added to the sense that markets were worried about the negative knock-on effects of a trade war on the supply chain running from the country’s commodity exporters and through Chinese factories to US markets.

If another risk-off sweep is truly in the cards, haven-seeking flows are likely to boost the greenback while the Yen gains amid the unwinding of carry trades funded in terms of the perennially low-yielding Japanese unit. The Euro may suffer outsized among the G10 FX majors.

The Canadian Dollar traded higher, retracing some of the prior session’s dramatic losses. The currency suffered the largest drop in over two months against an average of its major counterparts after disappointing GDP data undercut BOC rate hike bets. Indeed, it tellingly fell alongside local front-end bond yields.

See our free guide to learn how to use economic news in your trading strategy!

ASIA PACIFIC TRADING SESSION

Asia Pacific Trading Session Economic Calendar

EUROPEAN TRADING SESSION

European Trading Session Economic Calendar

** All times listed in GMT. See the full economic calendar here.

FX TRADING RESOURCES

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter