01.11.2019: USD buyers’ sentiment improves amid nonfarm payrolls (USDХ, CAD, EUR)

01.11.2019: USD buyers’ sentiment improves amid nonfarm payrolls (USDХ, CAD, EUR)


The trading volume was low ahead of publication
of the macroeconomic statistics from the United States. Traders were selling the American currency
in anticipation of the pessimistic data on the jobs market conditions in the US. The demand for safe-haven assets increased,
and the yen managed to surge to a 3-week high. The US dollar was trading in bearish bias,
particularly against the yen. Overall, this downfall was predictable as
in October the American currency was under overbought conditions. The greenback needed to correct its movement
after the Federal Reserve had reduced the interest rate. Today’s reports on the business activity
are of major importance as they may have a significant impact on the further monetary
policy decisions of the US financial regulator. Later in the day, four Fed policymakers will
deliver speeches. They are expected to provide their views on
the recent macroeconomic statistics. Meanwhile, the nonfarm payrolls report showed
an increase of 128 thousand jobs which exceeded analysts’ expectations. It means that the economy shrugged off the
negative effect of the recent General Motors strike that could seriously affect the jobs
growth in the manufacturing sector. At the same time, the unemployment rate increased
slightly but remained at the lowest level for the past fifty years. Dollar buyers were encouraged by this news. Shortly after the publications, the US dollar
index advanced to 97.43. A new waves of buy deals pushed the EURUSD
pair to the downside, so it did not manage to break the level of 1.12. After falling across the board, the American
dollar weakened against the Canadian dollar as well. Downward correction was seen in the USD/CAD
pair. However, today’s macroeconomic statistics
from the US provided support to the greenback and it resumed a rally against the loonie. In the middle of the American session, the
quotes returned to 1.3179. For now, the Canadian dollar has no reason
for recouping losses. The Bank of Canada is less optimistic about
the economic outlook. It downgraded the GDP growth forecast for
the nearest two years. Besides, the policymakers do not rule out
monetary policy easing. A rise in oil prices may help the Canadian
dollar gain ground. Market participants paid little attention
to the fact that Donald Trump is facing a risk of impeachment. After publication of the jobs data, quotes
may start trading sideways, waiting for news signals from the Fed. The nonfarm payrolls may prompt the regulator
to put rate cuts on hold until next spring.

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