US dollar high since early April ahead of critical NFP
What to know on Wednesday July 2:
The US dollar started the month on a solid footing after closing its best month in 4.5 years. On Thursday, ahead of the much-anticipated Non-Farm Wages report, the dollar hit three-month highs, but traded in narrow ranges as traders brace for whether the Federal Reserve will begin to cut policy measures. monetary stimulus as soon as possible. The US dollar index, which measures the greenback against six major counterparts, hit 92,601, the highest since early April.
EUR / USD fell to 1.1837 as a new low, but broadly consolidated to a critical support structure which proves to be a tough nut to crack on first attempts. The 4-hour price action is moving sideways into the monthly demand zone, which could easily see the price correcting higher, especially if the US NFP impression falls short of expectations. Recent national data also favors the bulls, with Eurostat reporting that the unemployment rate fell to 7.9% in May, from an analysts estimate of 8%. Additionally, Markit Manufacturing PMI edged up to 63.4 in June and beat market expectations of 63.1.
GBP / USD fell on Thursday after Bank of England Governor Andrew Bailey warned of overreacting to rising inflation in Britain. Cable slipped in morning trading to $ 1.3752, its lowest level since April. Andrew Bailey of the Bank of England said in his annual Mansion House address that it was important to ensure that the recovery was not jeopardized by premature tightening of monetary conditions, as higher inflation was likely to be temporary. Sterling also faces uncertainty over the spread of the Delta variant of COVID-19 in the UK. Earlier this month, the government forced the government to delay the full reopening.
AUD / USD rebounded earlier in the day, but bears took over in the 0.7500 area and bulls were rocked to the 2021 low of 0.74650.
The price of gold was higher despite a further rise in the US dollar. XAU / USD was at $ 1,776.30 at the close and between the low of $ 1,765.78 and the high of $ 1,783.01.
WTI was at $ 74.94 and over 1.97% until the close on Wall Street. Price moved from a low of $ 73.41 to a new cycle high of $ 76.20 earlier in the day.
The three major US stock indexes ended the session in positive territory. The Dow Jones Industrial Average added 131.02 points, or 0.38%, to 34,633.53, the S&P 500 added 22.44 points, or 0.52%, to 4,319.94 and the Nasdaq Composite a added 18.42 points, or 0.13%, to 14,522.38.
For the day ahead, this is the highly anticipated non-farm payroll in the United States.
Snapshot of non-farm wages in the United States in June: analysis of the reaction of major pairs to the surprises of the NFP
- The non-farm payroll in the United States is expected to increase by 690,000 in June.
- There is a strong correlation between surprising NFP impressions and immediate major pair moves.
- Investors are likely to react more strongly to a disappointing NFP than to a positive reading.