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Euro Slips to $1.185 as Strong US Jobs Data Boosts Dollar
The euro reversed early gains to trade around $1.185 as the US dollar strengthened following stronger-than-expected US jobs data, which dampened expectations for imminent Federal Reserve rate cuts.
Payrolls rose by 130,000 in January, the biggest increase in over a year, while the unemployment rate unexpectedly declined to 4.3%.
Traders now fully price in a Fed rate cut by July rather than June, with less than a 5% chance of a March move.
Pressure on Iran
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BoC minutes
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XAUUSD UPDATE
- Breakout through 5092 (high 5119) followed by a $100 post-NFP drop and then back up needs to establish 5092 as support and break 5119 to build momentum to the upside.
- It’s easy for me to say XAUUSD keeps a bid as long as it holds 4980-00 as support when it drops $100 but it has worked ouT..
XAUUSD 4 HOUR CHART
BTCUSD (BITCOIN) UPDATE
- Having failed to hold 70-72K, momentum building again to the downside, highlighted by the break of the 67245 range bottom.
- However, with little on charts until the 59886 low, there are no obvious stops levels to go after, leaving it dependent on staying above 65K to keep thoughts of the low contained.
BTCUSD 4 HOUR CHART
Market Update
Follow through has proved limited (on both sides) across markets following the US jobs report beat.
- US bond yields are off the highs (10 year last 4.172%)
- USD still bid and up on the day but off its highs… USDJPY an exception but staying above its 152.80 low
- USDCAD is closest to its high as talk Trump considering canceling USMCA weighing on the CAD (although it would take Congressional approval to break a treaty)
- US stocks have backed off earlier highs, putting NAS100 focus back on 24800-25000 and US500 back on 6900
- XAUUSD extended its high above 5100 before retreating back into its range.
- Partial government shutdown remains a risk as deadline nears
US jobs report beat… NFP beat, jobless rate slkips, waqges rise… Benchmark revisions so far ignored
Initial reaction: USD up, yields up, stocks holding firm
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US jobs report beat… NFP beat, jobless rate slkips, waqges rise… Benchmark revisions so far ignored
USD up, yieldsw up, stocks holding firm
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Brent Crude Oil Tops $70
Brent crude oil futures rose more than 2% to above $70 per barrel on Wednesday, approaching the highest since September, on renewed Middle East tensions.
Capping further gains, however, was a US industry report showing a sharp build in stockpiles, with inventories rising by 13.4 million barrels last week
Investors will also turn to OPEC’s monthly market outlook later today, followed on Thursday by an IEA assessment that has warned supply is set to outpace demand, resulting in a sizable surplus this year.
CAD slips (USDCAD up) on this headline. As always with President Trump, actions speak louder than words or headlines
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CAD slips (USDCAD up) on this headline. As always with President Trump, actions speak louder than words or headlines
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DAX Extends Losses
With corporate earnings in the spotlight, the DAX extended losses on Wednesday. Anxiety ahead of the job market update from the U.S. which is expected to be decisive for the Federal Reserve’s monetary policy strategy lingered.
The DAX benchmark that tracks the performance of the 40 largest companies listed on the Frankfurt Stock Exchange is currently trading 0.33 percent lower at 24,903.30, versus the previous close of 24,985.82. The day’s trading ranged between a high of 25,001.16 and a low of 24,849.77. The index had touched an all-time high of 25,507.79 on January 13.
In the 40-scrip index, only 13 scrips are trading in the overnight green zone.
The Dollar Is Drifting Back Down Toward Multiyear Lows
The dollar is falling back toward multiyear lows reached late last month.
On Jan. 27, the WSJ Dollar Index hit the lowest since April 2022, after President Trump said he wasn’t concerned about declines in the currency.
It rebounded in the following days, after Treasury Secretary Scott Bessent reaffirmed the U.S.’s longstanding strong-dollar policy and Trump nominated Kevin Warsh as Federal Reserve chair.
Since late last week it has sold off again, notably against the Japanese yen after a thumping election victory for Prime Minister Sanae Takaichi.
Early Wednesday, the Dollar Index traded at 96.49
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