- Major Currencies Continue to Feel Pressured
- Job Numbers Awaited to Improve Sentiment
- Tech Sell-Off Continues on Wall Street
Dollar strength remains the story of the week for the forex market so far. Traders are not emerging from the safe-haven Dollar just yet as the market endures more turbulent days. This has continued to stifle particularly the Euro and Sterling. Employment numbers are due later today which may add a silver lining if they meet the expectations of another steady decline in new claims. Meanwhile, the NASDAQ continued to suffer with traders in the stock market opting to continue selling many of the big tech names despite their overwhelmingly positive earnings for the quarter.
Dollar Remains Order of the Day
The Greenback started the week strong amid concerns on several issues that seemed to rock confidence in the market. These include the huge caseload in India where COVID-19 remains a huge problem, but more significantly feelings that the market may be overheating in certain areas have driven traders back to Dollar safety.
This continues to be the case through mid-week with both the Pound and Euro being held back and pointing in a downward direction largely through no fault of their own. The risk-off feeling among those in forex trading at the moment means that Dollar strength has simply outweighed the power of these other major currencies. Outside US trading hours the Dollar appeal has been further elevated by strained relations in the Asia-Pacific region as China announced plans to end strategic alliance with Australia.
Key Data Awaited to Lift Cloud
Today sees the release of American NFP numbers with initial jobless claims set to fall again. Analysts are predicting this number to come in at 527,000 which, though still remaining very high, would continue the move in the correct direction for jobs in the economy.
This may provide some positive feeling to the market as forex brokers also await direction from the Bank of England and how this might impact the GBP market. ECB President Christin Lagarde is also set to speak today. Eyes will be on these statements and whether they give any similar indication of rising rates as Treasury Secretary Janet Yellen has mentioned earlier in the week in what many feel was the precursor to a rollercoaster couple of days in the market.
Highs and Lows on Wall Street
It was another day of contrast yesterday on Wall Street. While the Dow Jones closed at a record high, the tech-heavy NASDAQ continued to tumble. After-hours trading was flat as many in big tech especially, look to close the book on a difficult week in spite of their monster quarterly earnings.
Fear of higher rates would seem to be a key driver behind this period of decline with both Amazon and Facebook dropping back more than 1% as the oversight committee of the latter agreed to uphold the platform’s ban on former President Trump at least for the time being.