Forex Today – Asian Session: The dollar continues to lose

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What to watch for on Friday, September 2:

Financial markets started September on the wrong foot, as recession-related concerns were exacerbated by China’s announcement that Chengdu, a city of roughly 21 million people, has been placed in lockdown over coronavirus. The US dollar rose, helped by upbeat local data and gloomy markets.

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In Europe, attention remains focused on the energy crisis. The European Commission is working on a market intervention to limit energy prices and reduce electricity demand after Russia drastically reduced gas supplies to the Union. President Ursula Von der Leyen will speak on the matter on September 14.

Russian Deputy Prime Minister Alexander Novak, meanwhile, has signaled that the country could increase oil production this year, supporting the extension of the OPEC+ deal beyond 2022. At the same time, Gazprom is cutting gas supplies to France, while that Germany fears that the company will shut down the Nord Stream 1 pipeline again in mid-October.

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EUR/USD is trading around 0.9950, while GBP/USD has tumbled to 1.1497, now trading around 1.1540. Commodity-linked currencies ended the day mixed as AUD/USD dipped as low as 0.6780 while USD/CAD is flat around 1.3160. The USD/JPY pair rose to 140.22, its highest in over twenty years, and is now trading a handful of pips below the level.

Stocks remained under pressure, although Wall Street’s losses were moderate. The DJIA managed to post a modest intraday gain. However, the DXY soared to a multi-year high, while government bond yields also rose.

On Friday, the focus will be on the US Non-Farm Payrolls report. The country is expected to have added 300,000 new jobs in August, while the unemployment rate is forecast to remain at 3.5%.

Source: Fx Street

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