Forex Today: US jobs report to cap a volatile week

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This is what you need to know to trade today friday february 3:

Following the high volatility on Wednesday and Thursday, markets appear to have turned cautious on the last trading day of the week. As investors await the US January jobs report, the dollar index consolidates Thursday’s recovery gains slightly below and US stock index futures are trading in negative territory. Producer Price Index data for December will feature on the European economic calendar and S&P Global will publish final revisions to the January manufacturing and services PMIs for Germany, the Eurozone, the UK and the US. Finally, the ISM will release the US services PMI before the weekend.

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The European Central Bank (ECB) decided to raise official interest rates by 50 basis points (bp), as expected, and stated that it intends to opt for a further 50 bp hike in March, before reassessing the situation. During the press conference, ECB President Christine Lagarde refrained from committing to further rate hikes after March, noting that inflation risks are now more balanced. Lagarde’s restrained tone made the EUR/USD lost traction and the pair erased much of Wednesday’s gains before stabilizing around 1.0900 on Friday.

ECB Analysis: Lagarde Pushes Euro Down with Mixed Message on Moves Beyond March and Two More Dovish Comments

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Meanwhile, the Bank of England (BoE) announced that it had raised the monetary policy rate by 50 basis points to 4%, with 7 members of the Monetary Policy Committee voting in favor. The BoE statement revealed that the bank had lowered inflation forecasts and expected a shallow recession. In addition, Governor Andrew Bailey indicated that they will reassess the policy if the economy evolves in line with their main forecasts. The British pound came under strong selling pressure after the event and the pair GBP/USD fell to its lowest level since mid-January at 1.2220. As of early Friday, the pair continues lower and trades below 1.2200, pressured by risk aversion.

Bank of England quick analysis: Three dovish factors that will keep the pound lower for longer

Although US Treasury yields continued to decline on Thursday, renewed dollar strength forced XAU/USD to turn lower. Gold price retraced its weekly advance and was last seen trading in a tight channel slightly above $1,910.

January Non-Farm Payrolls Preview: Analyzing Gold’s Reaction to NFP Surprises

The USD/JPY it rebounded from multi-week lows on Thursday but failed to muster recovery momentum. As of early Friday, the pair is trading slightly above 128.50. Bank of Japan Governor Haruhiko Kuroda told Japan’s parliament on Friday that the BoJ should maintain ultra-loose policy to support the economy and create a conducive environment for companies to raise wages.

On Thursday, the Bitcoin it reached its highest level since mid-August, above $24,000, but ended up posting modest daily losses. The BTC/USD pair is now trading flat around $23,500. ethereum reversed direction after rising above $1,700 on Thursday and falling below $1,650 early Friday.

Source: Fx Street

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