Article / 06 December 2017 at 22:29 GMT

US Wrap: Crushed Loonie leads fellow currencies lower

FX Trade Strategist /
  • The US dollar is in demand ahead of the release of the nonfarm jobs report 
  • The ADP job data gain of 190,000 jobs bolstered nonfarm forecasts
  • The Loonie was crushed on a dovish Bank of Canada statement 
  • Short-term EURUSD technicals look bearish
By Michael O'Neill

NY Focus:
The US dollar was mixed to start the day on Wednesday, with traders looking ahead to the ADP employment data for the US, for clues to Friday’s nonfarm payrolls report. But there weren't any. The greenback got it together by the end of the day, and posted gains against all its main rivals apart from the Japanese yen and British pound, which were close to unchanged on the day.

The ADP jobs report modestly beat forecasts but managed to underpin the US dollar just the same. Meanwhile President Trump was all over the news. He announced that the US embassy in Israel would move to Jerusalem, and warned that the US government could be shut down by Saturday, blaming Democrats who want to bring in illegal immigrants for the budget woes.

GBPUSD traded sideways in the absence of fresh Brexit headlines. USDJPY traded in a similar fashion with traders content to wait for Friday’s employment report.

USDCAD was the biggest winer, rising 1.2%, from 1.2655 to 1.2805 after the release of the Bank of Canada statement. Policy rates were unchanged but the expressed concern about trade policies, caught the market short USDCAD, and the rally was on.


Oil prices sank despite a drop in weekly crude inventories, on trader worries about a jump in gasoline inventories. Photo: Shutterstock
Oil prices sank despite the Energy Information Administration reporting a 5.6 million barrel drop in weekly crude inventories. Traders were more concerned about the steep rise in gasoline inventories. WTI dropped from $57.19/barrel to $55.97/b.

Wall Street finished with tiny losses in the Dow Jones Industrial Average and S&P 500 and a tiny gain in the Nasdaq. A drop in energy shares was blamed for the move.

Thursday Focus:
EURUSD could be busy if Eurozone Q3 GDP (forecast 0.6%) differs from the previous print, or if European Central Bank president Mario Draghi delivers any comments on monetary policy at the Bank for International Settlements conference. If Draghi does not comments on policy, it will be an extremely dull session until Friday’s nonfarm payrolls report.

The short-term EURUSD technicals are bearish while prices are below 1.1830, looking for a break below 1.1780 to extend losses to 1.1710.

EURUSD one-hour chart

Source: Saxo Bank. Create your own charts with SaxoTrader; click here to learn more

– Edited by Robert Ryan

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Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.

06 December
John Shaw John  Shaw
Thanks Mike !!


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