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04.08.2023 Market Report


EUR/USD clings to mild gains around 1.0960 as traders brace for the NFP Friday. The US Dollar stays on the back foot alongside the US Treasury bond yields following Thursday’s mixed US data and ahead of the key jobs data. Eurozone Retail Sales coming up next. 


GBP/USD holds a positive note above 1.2700, snapping a four-day losing streak in early Europe on Friday. Investors digest the dovish BoE outlook amid a modest pullback in the US Dollar, supporting the pair ahead of the critical US NFP release. 


The USD/JPY pair attracts some buying following the previous day’s sharp retracement slide from the vicinity of the 144.00 mark, or a four-week high and climbs back closer to the 143.00 mark during the Asian session on Friday. The uptick, however, lacks bullish conviction as traders keenly await the release of the closely-watched US monthly employment details before placing fresh directional bets.


The US Dollar (USD) remains on the defensive below its highest level since July 7 touched on Thursday, which, along with a positive tone around the US equity futures, benefits the risk-sensitive Aussie. This, along with the Reserve Bank of Australia’s hawkish quarterly Statement on Monetary Policy (SOMP), indicating that interest rates may still need to go higher, lends some support to the AUD/USD pair. Adding to this, Commerce Ministry announced that the country will lift the anti-dumping and anti-subsidy tariff on barley imports from Australia, which turns out to be another factor acting as a tailwind for the major.


The NZD/USD pair oscillates in a narrow range below the 0.6080 mark in the early Asian session on Friday. Market participants prefer to wait on the sidelines ahead of the key events later in the day. The figure is expected to trigger volatility in the FX markets. Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against six other major currencies, snaps a five-day winning streak and currently trades near 102.48. 


Data released from the US on Thursday showed mixed readings. That said, the US Initial Jobless Claims increased to 227,000 for the week ended July 29, matching expectations. At the same time, the ISM Service PMI for July dropped to 52.7 from 53.9 prior and was worse than expected at 53. Additionally, Unit Labor Costs from Q2 increased to 1.6%, lower than the 2.6% expected. Investors will take more cues from US wage inflation and US employment data later in the day. The upbeat data could convince the Federal Reserve (Fed) to hike additional rates this year, which benefits the US Dollar and acts as a tailwind for the USD/CAD pair.


The USD/CHF pair consolidates its recent gains near 0.8745 during the early Asian session on Friday. Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against six other major currencies, snaps a five-day winning streak and currently trades near 102.48.


Oil prices rose for a second day on Friday, set for their sixth week of gains, after Saudi Arabia and Russia, the world’s second and third-largest crude producers, pledged to cut output through next month.


The gold price oscillates around $1,935 heading into the early European session on Friday. Market participants await the US Nonfarm Payrolls figure due later in the American session.

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