Key Takeaways

  • The US dollar hurtling towards a 12-week victory run
  • Markets look ahead to today’s US nonfarm payrolls data

Peer Pressure

The US Dollar continues to dominate the forex market, knocking other currencies out of the park with a 12-week winning streak. Earlier in the week, the USD touched an 11-month high of 107.40, settling today at around 106.40. This current winning stretch is its longest since a similar 12-week spell in October 2014. 

The Japanese Yen surprised market participants on Wednesday when it hit the ¥150 mark against the dollar, before a sharp drop to ¥148, prompting whispers of government intervention in the form of a massive cash injection. 

Japan’s Finance Minister, Shunichi Suzuki, refused to comment directly on the situation, only stating that the government is “watching market developments very carefully,” adding that they are “ready to take necessary action against excess volatility, without ruling out any options.” 

On the other hand, the euro is on track to set a record of 12 straight weeks of declines against the US dollar, presently languishing near  $1.050. Similarly, the British Pound (GBP) logged a 6-month low at $1.2040 before recovering to a still underwhelming $1.22. The loss comes as part of the sterling’s fifth consecutive week of losses as it continues to struggle against the buck.

All Eyes on Jobs Report

Traders are sizing up the greenback as they anticipate the results of September’s nonfarm payrolls data. The jobs figures are of particular interest to the Federal Reserve, which uses the data as one of the key metrics that shape benchmark interest rates. 

Economists predict that approximately 170,000 jobs were created in September, while unemployment rates dipped to 3.7% from a previous 3.8%. Federal Reserve Governor Christopher Waller is due to speak today. His speech is expected to contain insights that can help investors to further understand what the Fed’s next move might be. 

Traders, as always, should continue to monitor the market. The outcome of today’s payrolls report may cause volatility, emphasizing the need to stay vigilant in an ever-changing environment.