Forex Today: US Dollar retreats following NFP-inspired rally

Here is what you need to know on Monday, November 9:

The US Dollar (USD) loses strength early Monday following the bullish action seen at the end of the previous week. The European economic calendar will feature Sentix Investors Confidence data for November. Later in the day, several policymakers from the Federal Reserve (Fed) are scheduled to deliver speeches. On Tuesday, October Consumer Price Index data from the US could ramp up the market volatility.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.21%	-0.27%	-0.19%	-0.16%	-0.40%	-0.95%	-0.13%
EUR	0.21%		-0.05%	0.04%	0.04%	-0.20%	-0.75%	0.07%
GBP	0.27%	0.05%		0.11%	0.09%	-0.15%	-0.69%	0.13%
JPY	0.19%	-0.04%	-0.11%		0.01%	-0.22%	-0.77%	0.05%
CAD	0.16%	-0.04%	-0.09%	-0.01%		-0.23%	-0.78%	0.04%
AUD	0.40%	0.20%	0.15%	0.22%	0.23%		-0.55%	0.27%
NZD	0.95%	0.75%	0.69%	0.77%	0.78%	0.55%		0.83%
CHF	0.13%	-0.07%	-0.13%	-0.05%	-0.04%	-0.27%	-0.83%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

TMGM талдауы: Қаржы нарығы жаңалықтары, экономикалық күнтізбе және нарықтық шолулар

The US Bureau of Labor Statistics reported on Friday that Nonfarm Payrolls (NFP) rose by 165K in October. This print followed the 60K increase recorded in September (revised from 29K) and surpassed the market expectation of 65K by a wide margin. Moreover, the Unemployment Rate declined to 4.1% from 4.2% in this period, while the Labor Force Participation Rate improved to 61.9% from 61.8%. With the immediate reaction to upbeat labor market data, the USD Index gathered bullish momentum and gained about 0.7% on the day. In the European morning on Monday, the USD Index corrects lower but manages to hold slightly above 102.00.

Improving risk mood at the beginning of the week seems to be making it difficult for the USD to continue to outperform its rivals. US President Donald Trump said fresh attacks on Iran were “highly unlikely” if negotiations to end the conflict continued to progress, CNN reported. Trump is expected to meet with Qatar's Prime Minister later in the day to discuss a new ceasefire and resuming nuclear talks. Meanwhile, Saudi Arabia said a Saudi Aramco administrative building in Riyadh was damaged by falling debris following an attempted attack, and the Saudi-led coalition claimed to have intercepted two ballistic missiles and two cruise missiles targeting the kingdom. Oil prices edge lower early Monday, with the barrel of West Texas Intermediate losing about 1% on the day.

Reflecting the positive shift in market sentiment, US stock ndex futures trade in positive territory, with the Dow Futures leading the day with a 0.7% gain at the time of press.

EUR/USD fell nearly 0.7% on Friday and erased its weekly gains. Early Monday, EUR/USD clings to marginal recovery gains above 1.1150.

Gold registered losses on Friday but rose nearly 5% for the week. The precious metal gains traction to start the new week and trades above $4,100, up about 1% on the day.

Gold’s resilience hints at returning safe-haven appeal

Analysts at OCBC highlight that Gold’s performance has been notable in recent sessions, with “Gold’s relative resilience despite the sharp equity selloff” seen as “encouraging.” They argue that, following the recent correction and a reduction in speculative positioning, “Gold may be gradually regaining some of its safe-haven appeal, potentially providing shelter amid turbulence elsewhere in financial markets.” However, OCBC cautions that “the extent to which Gold can hold up if equity weakness persists will be an important test,” suggesting that the durability of this renewed safe-haven bid will hinge on how risk assets trade in the days ahead.

GBP/USD gathers recovery momentum and rises toward 1.3400 early Monday after having closed in negative territory for two consecutive days. Later in the day, Bank of England Governor Andrew Bailey will speak at the Swiss Institute of International Studies Lecture Series and Dinner at the University of Zurich in Switzerland.

USD/JPY gained about 0.5% on Friday to end the previous week in the green. The pair struggles to keep its footing and declines toward 158.00 in the European morning.

US Dollar FAQs

What is the US Dollar?

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

How do the decisions of the Federal Reserve impact the US Dollar?

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

What is Quantitative Easing and how does it influence the US Dollar?

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

What is Quantitative Tightening and how does it influence the US Dollar?

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

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