Forex Today: NFP-inspired dollar rally stalls at start of week

This is what you need to know to trade today monday august 8:

Buoyed by the positive July jobs report, the DXY dollar index gained 0.8% on Friday and ended a two-week losing streak. Markets remain relatively quiet early on Monday with the DXY index consolidating Friday’s gains. In the European economic agenda will be published Sentix Investor Confidence Index data for August. There will be no big impact data out in the US and risk perception could drive market action in the second half of the day. US stock index futures have risen slightly in European morning, pointing to a neutral market sentiment.

The Bureau of Labor Statistics reported Friday that NFP nonfarm payrolls increased by 528,000 in July, beating market expectations of 250,000 by a wide margin. According to the CME Group’s FedWatch tool, the probability of a 75 basis point Fed rate hike in September now stands at 68.5%, compared to 29% a week ago. With hawkish Fed expectations dominating markets, the benchmark 10-year US Treasury yield rose above 2.8%. In an appearance before the Kansas Bankers Association over the weekend, Fed Governor Michelle Bowman said that strongly supports large-scale interest rate hikes to fight inflation.

Meanwhile, it is reported that China to continue military drills in Taiwan’s seas and skies on Monday. Before the weekend, the Chinese Ministry of Foreign Affairs announced that Sanction the Speaker of the US House of Representatives, Nancy Pelosifor his visit to Taiwan.

Data from China showed the trade surplus widened to $101.26 billion in July from $97.94 billion in June. In annual terms, exports increased by 18% in that period, exceeding the analyst estimate of 15%.

During Asian business hours, Reserve Bank of New Zealand inflation expectations for Q3 lowered to 3.07% from 3.29% in the previous quarter. However, the reaction of NZD/USD to these data was relatively muted. At time of writing, the pair quotes at 0.6240, up 0.24% on the day.

The pair EUR/USD fell below 1.0250 after Friday’s US employment report, but managed to erase part of its daily losses. However, the pair is still trading below 1.0200 at the start of the week.

Having broken a two-week winning streak, the GBP/USD trades in a relatively tight range below 1.2100 early Monday.

Driven by rising yields and the overall strength of the dollar, the USD/JPY he gained over 200 pips on Friday. The pair continues to rise towards 135.50 in European morning.

The Prayed lost its bullish momentum on Friday and suffered heavy losses. XAU/USD is trading higher and lower in a tight range above $1,770 on Monday.

The Bitcoin gains momentum on Monday and is now up over 2% on the day at $23,750. The ethereum It trades near the top of its two-week range near $1,700, up 2% on the day.