Market Drivers – US Session, Nov. 2

The US Dollar lost ground on Thursday due to economic data from the US, which showed Initial Jobless Claims rose to the highest level in seven weeks and Continuing Claims reached the highest since April.

The US official employment report is expected to show an increase of 180,000 jobs, with the unemployment rate remaining at 3.8%. The US Dollar index reached a weekly low but then trimmed its losses, ending the day above 106.00.

The 10-year Treasury yield closed at 4.66%, the lowest level since October 13. EUR/USD rose and closed above 1.0600, but the upside was limited by the 55-day Simple Moving Average (SMA).

The Bank of England kept its rate unchanged at 5.25%, with a 6-3 vote. The Pound initially strengthened due to an upward revision to inflation forecasts but later retreated. The improvement in risk sentiment, higher crude oil prices, and a weaker Dollar pushed USD/CAD sharply lower.

The Canadian Dollar outperformed. Canada will release its jobs report on Friday, with a positive net change in employment expected at 22,500. Analysts at TD Securities predict job growth to slow to 25k in October, slightly below the 6m trend and in line with the market consensus.

AUD/USD posted the highest daily close in months above 0.6400, but it finished far from the daily high it reached at 0.6455. Gold moved sideways throughout the day, hovering around $1,985, while Silver dropped to $22.70, erasing Wednesday’s gains.

What to watch on Friday

On NFP Day, Australia will report Q3 Retail Sales, China Caixin Service PMI, Eurostat will report the Unemployment Rate, and the US and Canada will release their employment reports.

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