Daily FX Trading Update: Traders Anticipating Upside NFP Surprise

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USD
The US dollar advanced against its forex counterparts when the leading jobs indicators hinted at an upside surprise for the NFP. The ADP non-farm employment change report showed a 172K gain versus the projected 158K increase and the previous 168K rise. Analysts are expecting to see a 175K gain in hiring for the NFP report and an increase in the jobless rate from 4.7% to 4.8%. Revisions to previous reports could also have a strong impact on dollar action.
EUR
The euro slumped against its forex peers as the ECB minutes acknowledged the potential repercussions from a Brexit. German industrial production was weaker than expected with a 1.3% slump versus the projected 0.1% uptick. Only the German trade balance and French industrial production numbers are due from the euro zone today.
GBP
The pound tried to limit its losses and drew a bit of support from better than expected UK manufacturing production numbers. Manufacturing production fell 0.5% versus the estimated 1.0% decline while industrial production showed a smaller than expected drop as well. Only the goods trade balance is due from the UK today.
CHF
The franc gave up ground to its counterparts once more after the foreign currency reserves showed a gain from 602 billion CHF to 609 billion CHF. Swiss CPI was slightly better than expected at 0.1% instead of the estimated flat reading. The Swiss jobless rate is due today and no change from the previous 3.5% figure is eyed.
JPY
The yen was mostly stronger in recent trading sessions as risk aversion stayed in the financial markets. Data from Japan came in mostly weaker than expected today, with the current account balance and average cash earnings falling short of consensus.
Commodity Currencies (AUD, NZD, CAD)
The Kiwi was one of the leading performers for the day after an RBNZ official said that lowering rates further would lead to financial instability. Meanwhile, the Australian dollar suffered after the S&P downgraded the country’s sovereign debt rating on political uncertainty. Canada released mixed reports, with a strong Ivey PMI and a downbeat building permits figure, and the jobs report is up next. Analysts are expecting to see a 5.5K gain in hiring and a rise in the jobless rate.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com
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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.