Daily Currency Update

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The U.S. dollar is having a technical bounce after oversold levels and it is being helped by robust employment data.

USD - United States Dollar

The U.S. dollar is getting a boost from the change in ADP Non-Farm Employment, which rose by 202K versus the expected number of 160k. At the time of this writing, the U.S. dollar, in terms of percentage, is gaining 0.3 versus the Euro, 0.09 against the Loonie, 0.23 versus the Japanese Yen, and 0.09 versus the Pound.

President Trump’s tweet posted yesterday night at 9:45 p.m. EST also helped the U.S. dollar to bounce. He said, "All is well! Missiles launched from Iran at two military bases located in Iraq. Assessment of casualties & damages taking place now. So far, so good! We have the most powerful and well equipped military anywhere in the world, by far! I will be making a statement tomorrow morning". His statement later today probably won't have an impact on currencies anymore, and market participants will start to focus again on fundamentals. Trump will speak to the American people at 11 a.m. EST from the White House to address the confrontation with Iran.

Key Movers

The Japanese Yen and Swiss Franc were acting as safe-haven currencies and had gained at the beginning of the Asian session. However, they pared gains following Iran, which said it wasn't seeking war with the U.S.: Iran had fired a series of rockets at two U.S.-Iraqi airbases. Foreign Minister Javad Zarif said the attack was in self-defence. As a consequence, the Yen and Swiss Franc fell in the European session, and at this moment, the Yen has fallen 0.23 percent versus the U.S. dollar.

In Europe, inflation expectations have climbed, boosting bond yields higher. This means that if the trend continues and becomes established, the Euro might be pressured to the upside.

The British Pound (GBP/USD) is having a low volatility session with a 0.68 percent range, a low of 1.3081 and a high of 1.3170. It is trading at 1.3122 at the time of this writing. There are no real catalysts so far, and clearly underlying flow and thin liquidity are driving the move. Furthermore, the European Commission President, Ursula von der Leyen, has warned the U.K. there are "tough talks ahead" in free trade negotiations over the next year. According to Sky News, Ursula von der Leyen said that both sides would have to "prioritise" which elements are negotiated before the end of December 2020.

Expected Ranges

USD/CAD: 1.3006 - 1.3039 ▲

EUR/USD: 1.1109 - 1.1134 ▼

GBP/USD: 1.3095 - 1.3139 ▲

AUD/USD: 0.6850 - 0.6890 ▼

NZD/USD: 0.6617 - 0.6643 ▼