Forex Today: Risk-off continues on coronavirus pandemic fears, US non-farm payrolls eyed – FXStreet
Forex today in Asia fails to repeat the pre-NFP trading lull as coronavirus (COVID-19) carnage continues to weigh on risks. Wall Street jumped back into the sea of red and so does the Asian stocks by the press time.
Increasing global worries, commensurate with the numbers, about the pandemic, keep pushing traders off the commodities and the linked currencies like the dollars of Australia and New Zealand. However, this doesn’t mean that the US dollar recovered from its two-month low.
Among the G10 currency pair, NZD/USD benefited from the USD weakness as RBNZ becomes the only dollar-dominated central bank left to announce a rate cut. On the other hand, USD/CHF portrays the current risk aversion while declining to the fresh 24-month low.
EUR/USD remains mildly positive whereas USD/JPY flashes fresh six-month low under 106.00. Even so, USD/CAD continues to remain positive as WTI stays weak despite OPEC headlines/speculations, on expectations of downbeat demand. Further, gold prices rise towards the previous month’s multi-year top amid risk aversion while GBP/USD seems to be the choppiest following the end of Brexit deal talks and BOE’s signal of no immediate rate cut.
Main topics in Asia
Key focus ahead
When it’s the first week of the month, employment numbers from the US and Canada are undoubtedly the key catalysts to watch. While the US Nonfarm Payrolls remain in the spotlight, today’s February month jobs report will be the key to determine whether the Fed and the BOC have more room after the recent 0.50% rate cuts.
On the qualitative front, the Fedspeak could try to offer intermediate moves to the markets while coronavirus relating headlines will continue to be the major catalyst.
Furthermore, OPEC meeting is still on with speculations mounting that the cartel will propose 1.5 bbl/day to its alliance with Russia and other allies, broadly known as OPEC+.
Euro has become a haven currency due to ECB’s negative rates and Eurozone’s current account surplus. The buying interest around the single currency remains strong on Friday with investors selling risk in favor of safe havens on reports stating the coronavirus is looking like a global pandemic.
GBP/USD is struggling to clear resistance of the trendline falling from December and January highs on Friday despite the slide in the US treasury yields. Dovish BOE expectations could keep gains in GBP under the check.
Non-farm payrolls are expected to rise by 175,000 in February following January’s 225,000 increase. The unemployment rate is expected to be unchanged at 3.6%. Hourly earnings will rise 0.3% after January’s 0.2% gain. Annual earnings should increase 3% following 3.1% in January. Average weekly hours will be stable at 34.3.
Back in January, Canada reported an increase of 34,500 jobs, beating expectations. While employment figures are choppy in the North American nation, they have generally been upbeat since early 2019 onwards. An increase of 10,000 positions is on the cards for February and the jobless rate is forecast to edge up to 5.6%. While the bar is low for an upside surprise – it may not be enough for the loonie.
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