USD falls as markets expect weak payrolls data
Asian stocks rose as the markets waited for US non-farm data. This is usually one of the most important numbers of the month. It is often used as a barometer of the health of the US economy. The markets expect the economy to have added more than 186k jobs in November. This will be slightly higher than the 128k jobs that were added in October. The unemployment rate is expected to remain unchanged at 3.6%. Still, there are signs that the jobs data could disappoint. Firstly, the ADP jobs data released on Wednesday showed that 67k private payrolls were added. Secondly, the four-week average claims increased to 217k from 215k. Consumer confidence data from the Conference Board declined for fourth straight months while the employment component of the ISM manufacturing data continued to decline.
The price of crude oil declined slightly during the Asian session as traders focused on the ongoing OPEC meeting in Vienna. Members agreed to cut production by about 40% in the coming year. This means that OPEC will hold back about 1.7 million barrels a day. This news did not move the price of oil as the market continued to assess the details. This is because Saudi Arabia is already producing 400k barrels a day below its current quota and Russia has received an exemption on sales of condensates. Members like Nigeria have not slashed production as agreed. At the same time, non-OPEC members like the US are expected to increase production in the coming year.
The Japanese yen was little moved after the country released disappointing spending data. Data showed that average cash earnings remained unchanged at 0.5%. This was below the consensus estimates of 1.1%. Household spending declined by an annualised rate of 5.1% after rising by 9.5% in September. This was the biggest decline since July 2016. The household spending declined by 11.5%, after rising by 5.5% in September. This data came a day after the country launched a $120 billion stimulus package.
The EUR/USD pair rose to a high of 1.1107 as the market waited for official employment data from the US. The price is along the upper line of the Bollinger Bands on the four-hour chart. The RSI is slightly below the overbought level of 70 while the Parabolic SAR dots are below the price. The pair may continue moving higher as the market anticipates disappointing US jobs data.
The XBR/USD pair declined slightly during the Asian session as the market received more information from the OPEC meeting. The pair is trading at 62.67, which is lower than yesterday’s high of 63.55. Still, the price is higher than this week’s low of 60.00. The price is along the 28-day moving averages and slightly below the 14-day average. The RSI has been moving lower from a high of 82.32 to a low of 50.21. The momentum indicator has been moving lower. The pair may decline to the 61.8% Fibonacci Retracement level of 62.20.
The GBP/USD pair continued to soar, and reached a high of 1.3158. This is the highest level in more than 2 years. The price is above the 14-day and 28-day moving averages while the RSI has moved to the overbought level of 81. The momentum indicator has moved to above 100 while the Parabolic SAR dots are below the price. While the pair may continue rising, it’s likely that it may also have a pullback ahead of the election.