Market Drivers – US Session – On the Eve of NFP Revision: What’s Next for the US Dollar?

The US dollar continues its recent downward trend, a movement influenced by ongoing analysis of the latest employment figures and growing speculation about potential interest rate cuts by the Federal Reserve. This has left the currency under close watch by market participants.

The US Dollar Index (DXY) recently slipped to multi-week lows, hovering around 97.50, as US bond yields fell across the curve. This week, the market’s attention is primarily on the Non-Farm Payroll (NFP) annual revision, which will be a key indicator of the labor market’s health. Additionally, the National Federation of Independent Business (NFIB) Business Optimism Index and weekly crude oil inventory reports are also on the agenda.

Global Currency Performance

The EUR/USD pair has shown modest gains, testing the upper boundary of its trading range around 1.1750. The European Central Bank (ECB) is scheduled to have several officials speak, which could provide further direction.

The GBP/USD pair has risen for the second consecutive day, again challenging the significant resistance level near 1.3550. In the UK, the only key data release this week is the British Retail Consortium (BRC) Retail Sales Monitor, along with a speech from a Bank of England (BoE) official.

Meanwhile, the USD/JPY pair has shown erratic performance, briefly revisiting the 148.50 zone before losing momentum. The Japanese economic calendar includes the release of Machine Tool Orders.

The AUD/USD pair has climbed further, reaching a seven-week high just below the 0.6600 barrier. Australia’s key economic indicators this week will be the Westpac Consumer Confidence Index and the National Australia Bank (NAB) Business Confidence gauge.

Commodity Market Movements

In the commodity markets, WTI crude oil prices saw a slight increase, moving past the $62.00 per barrel mark. This rise came after three days of declines, with traders reacting to the latest output hike by OPEC+.

Gold prices have surged, climbing above $3,600 per troy ounce to reach a new all-time high. This historic price point is attributed to persistent expectations of further rate cuts by the Federal Reserve in the coming months. Simultaneously, silver prices have navigated above the $41.00 region, reaching levels last seen 14 years ago, reflecting a similar bullish sentiment.