The U.S. Dollar is trading weak at the midsession on light volume as traders even up positions ahead of tomorrow’s U.S. Non-Farm Payrolls Report.
The U.S. Dollar is trading weak at the midsession on light volume as traders even up positions ahead of tomorrow’s U.S. Non-Farm Payrolls Report. Traders appear nervous about tomorrow’s report because of yesterday’s ADP Report which showed a higher job loss than estimated. Today’s ISM Nonmanufacturing Report climbed less than expected and remained below the critical 50 number which indicates the economy is still weak. The Dollar started out weak based on the overnight trade, but has since erased some of the loss.
The GBP USD opened up strong this morning but has given back some of its gains. This market has firmed up the last two days because of oversold conditions and a better than expected U.K. Services Report.
This morning the European Central Bank announced that its benchmark interest rate will remain at 1.0%. This was expected by traders despite recent reports showing improvements in the Euro Zone economy. ECB President Trichet said that the road to recovery would be “bumpy” while explaining why the central bank is in no hurry to withdraw its emergency stimulus.
The EUR USD remains inside of its August range of 1.4449 to 1.4045. The support area is the 50% zone of this range at 1.4247.
Choppy equity markets are triggering a two-sided trade in the USD CAD. The lack of a major player in the market today is keeping this pair in a tight range. This market remains sensitive to energy and equity markets.
The USD JPY is trading higher today. Trading is light as traders lighten up positions ahead of tomorrow’s Non-Farm Payrolls Report. Today’s weak U.S. ISM Services Report sent some traders to the safety of the U.S. Dollar.
Demand is a little stronger today for the higher yielding NZD USD and AUD USD. Yesterday it was reported that the Australian economy grew more than expected but today a report indicated that the trade deficit widened. Exports fell and imports increased because stimulus plans increased domestic demand.