USD on standby ahead of US payrolls report
It has been a quiet start to the Friday session, and it usually is on the morning ahead of the US non-farm payrolls report which has been the focal data point for the week as we try to look past politics. Across the board, the USD is largely in consolidative mode, bar some minor weakness in GBP as traders look for easy targets against the greenback.
EUR/USD is the main gauge as a result and holding the upper 1.1300's, we can see that the market may be ready to re-challenge the 1.1400 level again if there is any weakness of note in today's employment report. While the headline will always prompt a kneejerk reaction, the focus is yet again on the earnings component, with forecasters looking for another 0.3% rise which would then take the annualised rate up to 3.2%. This would suggest there is further fuel in the US economy, despite growing concerns that tighter financial conditions and concerns over trade will start to see growth tailing off a little more than it has.
USD/JPY has been suffering a little, though far less than in previous episodes when stock markets have been in the turmoil we have seen this week. Relatively speaking, the pair has been holding up very well as buyers are attracted by yield differentials, though further losses in equity markets will firm up the JPY across the board at some point - including against the USD.
USD/CAD also stays bid and the dip below 1.3400 has been pretty shallow as yet. A less-hawkish BoC has really turned the screw on the CAD - against all pairs - so it stands to reason why spot remains elevated for now. Canadian payrolls also due out this afternoon, so we should see further volatility here later on today.