Dollar keeps its footing ahead of highly-anticipated US NFP data

The dollar stays resilient against its major rivals early Friday as investors gear up for the highly-anticipated Nonfarm Payrolls report for September. The US Dollar Index moves up and down in a narrow range above 112.00 following a two-day rebound, the 10-year US Treasury bond yield holds above 3.8% and US stock index futures trade flat early Friday. During European trading hours, the Bank of England (BoE) will release its Quarterly Bulletin for the third quarter and Statistics Canada will also publish the September jobs report.

On Thursday, the greenback found demand as a safe haven amid a souring market and continued to outperform its rivals. Additionally, hawkish comments from Fed officials helped the currency preserve its strength. Minneapolis Fed President Neel Kashkari said that the Fed was “quite a ways away” from a pause in policy tightening and Fed Governor Christopher Waller reiterated that he was expecting further aggressive rate hikes in the battle against inflation.

Meanwhile, US Secretary of State Antony Blinken said on Thursday that they were looking at options to respond to Saudi Arabia following the OPEC+ decision to significantly reduce crude oil production. Although the barrel of West Texas Intermediate (WTI) is trading in negative territory slightly above $88, it is up more than 10% on a weekly basis.

After having moved sideways near 0.9800 in the Asian session, EUR/USD came under modest bearish pressure and turned negative on the day below 0.9780. The data from Germany revealed that Retail Sales and Industrial Production contracted by 1.3% and 0.8% on a monthly basis in August, making it difficult for the shared currency to find demand.

GBP/USD lost nearly 200 pips on Thursday and close below 1.1200. The pair continues to stretch lower early Friday and was last seen trading at around 1.1130. The UK and EU restarted Northern Ireland Protocol negotiations on Thursday. Commenting on the latest developments, Irish Foreign Minister Simon Coveney said that he was not expecting to reach an agreement by October 28. “I do think we can make significant progress on some of the issues that really matter to the people of Northern Irelan,” Coveney added. “In particular to the unionist community and the business community.”

Gold’s losses remained limited on Thursday as the benchmark 10-year US Treasury bond yield struggled to gather bullish momentum after rising above 3.8%. XAU/USD stays relatively quiet at around $1,710 early Friday.

USD/JPY edged higher on Thursday and closed above 145.00. “Recent sharp, one-sided yen moves are undesirable,” Japanese Prime Minister Fumio Kishida repeated earlier in the day. “Japan’s intervention last month reflected the view that we cannot turn a blind eye to speculative FX moves.” The pair is moving sideways near 145.00 after these comments.

Bitcoin pushed lower amid risk aversion on Thursday and lost nearly 1%. BTC/USD was last seen posting small daily losses at $19,850. Ethereum closed unchanged on Thursday and seems to be having a tough time making a decisive move in either direction early Friday while holding above $1,300.

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