Despite a huge miss in US non-farm payrolls, where the nation added 235k jobs versus 733k expected in August, most stocks on Wall Street concluded the week higher. The tech-heavy Nasdaq 100 outperformed the S&P 500 and more cyclically-sensitive Dow Jones. Expectations that the Fed may not taper this month boosted growth stocks. Meanwhile in Japan, the Nikkei 225 soared after Japan’s Prime Minister Suga announced his resignation plan, opening the door to new leadership as calls for more stimulus mount.
With that in mind, it was another terrible week for the US Dollar as it underperformed virtually every G10 currency. The boost in market sentiment supported the growth-linked Australian and New Zealand Dollars. The Euro also received a bid after Euro-area inflation data surprised higher at the beginning of last week.
Turning to commodities, precious metals like gold and silver also shined against the backdrop of a weaker US Dollar. XAU/USD aimed for its highest close since the middle of June. XAG/USD shot upwards towards a near one-month high. Iron ore prices remain depressed, with fading Chinese demand woes still in play. Natural gas prices soared, hovering near all-time highs.
Looking at the week ahead, the Australian Dollar, Euro and Canadian Dollar are bracing for central bank rate decisions. The Reserve Bank of Australia (RBA), European Central Bank (ECB) and Bank of Canada (BoC) are on tap. Diverging economic situations could make for some volatility between AUD/USD, EUR/USD and USD / CAD.
Financial markets are offline in the United States on Monday for the Labor Day holiday. This could created illiquid trading conditions at the start of the week. Taking a look at key economic data to come, Euro-area and UK GDP are on the docket. China will release its latest inflation report while Canada offers its most recent labor market figures. What else is in store for markets ahead?
US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD
The US Dollar sank after a huge non-farm payrolls miss pushed back Fed tapering bets. Ahead, the RBA, ECB and BoC rate decisions may fuel AUD/USD, EUR/USD and USD/CAD volatility.
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Dismal NFP jobs data and a weaker dollar helped boost gold prices on Friday. We take a look at the week ahead to assess whether the move is likely to gain momentum
GBP/USD has been boosted of late by a weak US dollar and unless Sterling can find its own catalyst the pair may find further gains hard to come by.
Last week, a succession of European Central Bank hawks made clear they’d like it to tighten monetary policy, but they’ll be outnumbered by the doves this week and policy will stay just where it is now.
USD/CAD could lose further ground in the coming week on expectations that the weakening U.S. jobs market will lead the Fed to be more patient before withdrawing policy accommodation.
The Australian Dollar is looking to the RBA for clarity of taper timing amid diverging commodity prices and after US non-farm payrolls. Can the AUD/USD rally last?
It was another bearish week for the USD, but a big zone of support came in to hold the lows into the Labor Day weekend.
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Gold prices surged more than 9% off the August lows with the rally now probing a major resistance hurdle post-NFPs. Levels that matter on the XAU/USD weekly chart.
The Australian Dollar is facing actionable trade levels versus the US Dollar, Euro, and British Pound after a strong week for the Aussie Dollar.