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DailyFX US AM Digest: US Dollar Slumps, Jumps, then Settles after Mixed NFP

DailyFX US AM Digest: US Dollar Slumps, Jumps, then Settles after Mixed NFP

Research, Research Team

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FX markets are proving volatile at the close of the week thanks to a bevy of news flow and data hitting the wires over the past few hours. The British Pound is off of its earlier highs following the news that the UK and the EU had reached an agreement over the ‘divorce bill’ the UK faces before it can officially Brexit, clearing the path to move onto defining the trade relationship the UK and the EU will have after March 2019.

Meanwhile, the US Dollar has seen prices whipsaw this morning on the back of a rather mixed US Nonfarm Payrolls report for November. While the headline figure beat expectations (+228K versus +195K expected), the wage growth component was weaker (+2.5% versus +2.7% expected) keeping open the possibility that the Federal Reserve will downgrade their 2018 inflation forecast at their policy meeting next week.

DailyFX Economic Calendar: Friday, December 8, 2017 – North American Releases

DailyFX US AM Digest: US Dollar Slumps, Jumps, then Settles after Mixed NFP

With the November US jobs report in the rear view mirror, attention turns to the preliminary December US UofM Confidence report due out at 10/15 GMT (as this piece is published). The data shouldn’t prove too market moving when all is said and done, as these ‘soft data’ readings – confidence, sentiment, ISM, PMI, etc – have not had too great of an impact on the US Dollar in recent months.

DailyFX Webinar Calendar: Monday, December 11, 2017

DailyFX US AM Digest: US Dollar Slumps, Jumps, then Settles after Mixed NFP

IG Client Sentiment Index Chart of the Day: Spot Gold

DailyFX US AM Digest: US Dollar Slumps, Jumps, then Settles after Mixed NFP

Learn more about the IG Client Sentiment Index on the DailyFX Sentiment page

Spot Gold: Retail trader data shows 79.9% of traders are net-long with the ratio of traders long to short at 3.96 to 1. The number of traders net-long is 0.2% lower than yesterday and 5.0% higher from last week, while the number of traders net-short is 14.1% lower than yesterday and 10.4% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Spot Gold trading bias.

Five Things Traders are Reading

  1. “Next Week is Big for FX: Dollar, Euro, Pound in Focus Ahead of Fed, ECB, BoE” by James Stanley, Currency Analyst
  2. “US Dollar Whipsaws on November NFP as Jobs Beat, Wages Miss” by Christopher Vecchio, CFA, Senior Currency Strategist
  3. “Technical Analysis for EUR/USD, Euro & Sterling Crosses, and More” by Paul Robinson, Market Analyst
  4. “Preview for November US NFP and Outlook for Key USD Pairs” by Christopher Vecchio, CFA, Senior Currency Strategist
  5. “S&P 500 at Risk of Further Downside in Days Ahead” by Paul Robinson, Market Analyst

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