FX Pairs Tread Water Ahead Of Nonfarm Payrolls

No Surprises From BoC And ADP But GBP Comes Under Pressure
December 7, 2017
Danger Time For Gold Next Week
December 7, 2017

Market Drivers December 7, 2017

  • takes out 112.50
  • Trade data misses
  • 1.45% 0.25%
  • $56/bbl
  • $1257/oz.
  • $14400

Europe and Asia
AUD: Trade Balance 0.1B vs. 1.4B
EUR: EZ 2.6% vs. 2.6%

North America
CAD: Ivey PMI 10:00

Currencies were extremely quiet in Asian and early European trade with most of the majors hugging tight ranges amidst a quiet economic calendar and lack of any headline news.

The only noticeable movement was in the comm dollars which were weaker across the board for a variety of idiosyncratic reasons. The continued to fall in the wake of the BOC’s surprisingly dovish that appeared to suggest that the central bank will remain neutral for a considerable period of time.

As our colleague :

“To everyone’s surprise, the Bank of Canada completely dismissed the recent improvements in data, choosing instead to focus on moderating growth, considerable trade and geopolitical uncertainty and the ongoing slack in the labor market. For all of these reasons they felt the need for continued cautiousness on rate moves.�

USD/CAD rose to a high of 1.2833 in morning London dealing nearly reversing almost all of last Friday’s 200 point decline. For now, 1.2900 remains formidable resistance for the pair, but if US data this Friday surprises to the upside USD/CAD could sweep all the way to 1.3000 as interest rate differentials will begin to weigh on the loonie.

Meanwhile, in Australia, the also reversed the gains from earlier in the week, with the pair falling below the .7550 level in late Asian trade after Australian data fell woefully short of expectations coming in at 0.1B versus 1.4B eyed. The sharp falloff in exports indicates that demand from China may be tapering and that does not bode well for the unit long term.

In North America, the US calendar is very quiet and Canada only carries the report. Barring any fresh geopolitical news markets appear to be content to tread water for the rest of the day as everyone prepares for the marquee release of the NFP report tomorrow.