Dollar consolidates Fed-inspired gains, eyes on EU inflation, US NFP data

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Here’s what you need to know on Friday, January 7:

After outperforming rivals early Thursday on the hawkish FOMC tilt, the dollar appears to have entered a phase of consolidation on Friday as investors prepare for the December US jobs report. Market expectations point to an increase of 400,000 in non-farm payrolls in the United States and a drop in annual pay inflation to 4.1% from 4.8% in November. The European dossier will offer preliminary data on the consumer price index, retail sales and the business climate for December for the euro zone. Statistics Canada will also release December unemployment figures at the start of the US session.

Snapshot of the non-farm payroll: A strengthening labor market supports tighter monetary policy.

After the sharp decline observed on Wednesday, the main Wall Street indices closed slightly lower on Thursday and the benchmark 10-year US Treasury bond yield fell sideways below 1.75%. After minutes from the Fed’s December meeting showed policymakers deemed it appropriate to start liquidating the balance sheet after the first rate hike, the market price of a March hike jumped above by 70% before falling to 63% on Friday morning. The US dollar index moves sideways above 96.20, reflecting a neutral tone. In the meantime, US futures stock indices have changed little so far.

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EUR / USD closed in negative territory but seems to be struggling to move away from the 1.1300 mark. Core CPI inflation in the euro area is expected to decline slightly to 2.5% on an annual basis in December from 2.6% in November. A stronger-than-expected impression could help the shared currency remain resilient to its rivals and vice versa.

USD / CAD edged down despite the generalized strength of the US dollar on Thursday, as soaring crude oil prices helped the commodity-sensitive loonie find demand. Ahead of key data releases, the pair is trading at a touching distance of 1.2700.

Job Snapshot in Canada: Slowing job growth could make DAC’s situation worse.

GBP / USD tested 1.3500 early Thursday before recovering to the midpoint of 13,500. There will be no release of high-level data from the UK and the market valuation of the dollar should continue to boost US action. pair before the weekend.

USD / JPY appears to have stabilized around 116.00 after Thursday’s downward correction. Another rise in US T bond yields could give the pair a boost.

Gold suffered heavy losses Thursday and closed below $ 1,800. The pair appears to have broken below the uptrend that started in mid-December. XAU / USD remains fragile due to its strong inverse correlation with US T bond yields.

Bitcoin closed for the fifth day in a row in negative territory and continues to decline slightly towards $ 40,000. Ethereum Trading at its lowest level since early October and closing at $ 3,000.

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