- The US dollar is a little softer against its G10 peers this morning as markets await the latest labor market data. Treasury yields dipped a touch after recent volatility as traders look forward to this afternoon’s weekly jobless claims for further clues on the outlook for the US economy. The softer NFP data suggests claims could break above 250k after last weeks print came in above consensus at 249k versus estimates of 243k. Markets and FOMC policymakers continue to ‘data watch’ with markets currently fully pricing a cut from the FOMC at the September meeting – however, questions remain as to whether officials will reduce by 25bp or 50bp.
- The Japanese yen remains volatile as markets get used to diverging monetary policies from the BoJ and Federal Reserve. USDJPY rallied after dropping over the past few sessions with markets suggesting that around three quarters of global carry trades are now removed. A summary of the BoJ’s 31 July policy meeting showed that authorities believed that monetary policy would remain accommodative even after they hiked rates, lifting the benchmark rate to 0.25%.
- EURUSD snapped a two-day losing streak yesterday to consolidate around 1.0935 as the softer greenback boosted the single currency. The pair is supported at the pivotal 1.09 level, with a move above resistance at 1.0964 opening the possibility of a further run to test the key 1.10 level which was briefly breached earlier in the week.
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