In this article, we have covered the highlights of global market news about the GBP/USD, EUR/USD, USD/CAD and NZD/USD.
GBP/USD on the verge of crashing, sights on 1.1000
GBP/USD fell to an intraday low of 1.1089 as the American dollar strengthened after the US monthly employment data release. The nation generated 265K new positions in September, above estimates, while the unemployment rate unexpectedly fell to 3.5%, according to the Bureau of Labor Statistics. The sector’s resilience made it possible for the US Federal Reserve to maintain its record rate hike pace of 75 basis points at each meeting.
After Wall Street opened, the dollar’s rise stalled as equities held onto their opening-day losses without deepening their declines. Major pairings have recently rebounded due to some profit-taking before the weekend, but GBP/USD is not one of them; it is now struggling to maintain the 1.1100 level.
Technical Forecast: The GBP/USD pair has fallen for three days and is not far from the weekly low, reached on Monday at 1.1085. Technical signals in the near term favor a continuation of the negative trend in the short term, especially if the pair breaks those above the weekly low. The next significant support level is the September 30 daily low of 1.1024.
Chances of a rebound are almost nonexistent, but if the pair recovers above the 1.1130 price range, a corrective rise may surge.
EUR/USD recovers from weekly lows but is still around 0.9800
Although EUR/USD was able to recoup a significant chunk of its daily losses, it ran out of steam before hitting 0.9800. The price of the pair stood at 0.9780 as of the writing, down 0.1% daily. The recent market movement indicates that the currency pair will conclude the week flat.
The US Bureau of Labor Statistics statistics from earlier in the day showed that Nonfarm Payrolls increased by 263,000 in September. The market had anticipated a gain of 250,000, but this print exceeded that, helping the dollar outperform its competitors. Furthermore, the unemployment rate dropped from 3.7% to 3.5%.
The first response caused the US Dollar Index (DXY) to spike to a daily high of 112.82, pushing the EUR/USD to a weekly low of 0.9726. However, it seems that the dollar’s gains are being restrained as weekend flows and profit-taking push the DXY below 112.50 in the direction of the London fix.
The major Wall Street indexes are trading in severe downtrends, making it difficult for the EUR/USD to increase. The Nasdaq Composite and S&P 500 indices were down more than 2% on the day at the time of publication.
USD/CAD may hit 1.40 before reverting to 1.32 the following year, according to CIBC.
Because the Federal Reserve outperforms the Bank of Canada, the Canadian currency is expected to drop somewhat in the fourth quarter (BoC). But according to experts at CIBC Capital Markets, the loonie will advance in 2023 as the US Dollar loses popularity.
“The US Dollar has strengthened generally as a consequence of the Fed’s hawkish pronouncement in late September and global risk aversion, which has caused the loonie to weaken. Given the gap between where policy rates will peak and the tepid global growth favoring the US Dollar and restricting any upside for commodities, there is probably more to come.
NZD/USD finds some support at 0.5600 but seems susceptible in the face of a strong US Dollar.
Following the US labor market statistics publication, the NZD/USD pair experienced some selling pressure in the early North American session and fell to a four-day low. However, the pair makes a few pip gains and is now trading with little intraday losses, closing below the mid-0.5600s.
In response to the positive US NFP news, the US dollar reaches a new weekly high, putting downward pressure on the NZD/USD pair. According to the closely-followed employment report, the jobless rate surprisingly decreased to 3.5% in September from 3.7%. Additionally, the US economy created 263K more jobs during the reporting month than was expected.
Please click here for the Market News Updates from 7 October, 2022.