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DailyFX US AM Digest: US Dollar Rebounds from Initial NFP Losses

DailyFX US AM Digest: US Dollar Rebounds from Initial NFP Losses

Research, Research Team


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The US Dollar was briefly knocked back from its daily highs earlier today after the December US Nonfarm Payrolls report showed a less robust pace of jobs growth than anticipated. However, with clear evidence that the economy is still at “full employment,” losses were limited as the data had no material impact on Fed funds futures contracts’ timing of the next rate hike (still March 2018). Likewise, given that the unemployment rate is at the current cycle low and 17-year low at 4.1%, Fed policymakers, who still believers in the Phillips’ Curve, may dismiss the softening pace of jobs growth as they anticipate an uptick in inflation.

DailyFX Economic Calendar: Friday, January 5, 2018 – North American Releases

The major data is in the rearview mirror for Friday, and the data left a clear imprint on price action. The Canadian jobs data was easily the biggest surprise of the day, raising the specter of a Bank of Canada rate hike as early as this month (before today’s data, overnight index swaps were pricing in March 2018 for when the next BOC hike would come). It is worth noting that the second round of data due at 10 EST/15 GMT had little overall impact on price action, no surprise given that the US NFP report had already been released.

DailyFX Webinar Calendar: Monday, January 8, 2018

IG Client Sentiment Index Chart of the Day: Spot Gold

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

Spot Gold: Retail trader data shows 65.2% of traders are net-long with the ratio of traders long to short at 1.87 to 1. The number of traders net-long is 2.4% lower than yesterday and 12.1% lower from last week, while the number of traders net-short is 1.1% lower than yesterday and 17.0% 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. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Spot Gold price trend may soon reverse higher despite the fact traders remain net-long.

Five Things Traders are Reading

  1. “US Dollar Slumps then Jumps on Shaky December US NFP Report” by Christopher Vecchio, CFA, Senior Currency Strategist and Paul Robinson, Market Analyst
  2. “U.S. Dollar Checks, Bounces From Support on NFP Disappointment” by James Stanley, Currency Strategist
  3. “Preview for December NFP and Price Action Outlook for USD” by Christopher Vecchio, CFA, Senior Currency Strategist
  4. “Bitcoin & Ethereum Technical Overview – Price Levels to Watch” by Paul Robinson, Market Analyst
  5. “S&P 500 Chart Extended, but Momentum Not Worth Fighting” by Paul Robinson, Market Analyst

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