On Friday, the Greenback was hovering at 15-month lows vs. a basket of major currencies, as non-manufacturing index for July declined to 53.9 from 57.4 in June; however, Economists had forecast a reading of 57.0. In addition, the U.S. dollar remained under pressure as traders awaited the release of the U.S. non-farm payroll data for July, which could significantly affect the U.S. Dollar, as a separate report showed that U.S. initial jobless claims reduced by 5k to 240k last week, compared to expectations for a 3k decline to 242k.
On the release front, markets are awaiting Friday’s Non-farm Payrolls for July, which measures the change in the number of people employed during the previous month, excluding the farming sector. Meanwhile, economists expect U.S. employers to have added 183k workers in July, down from 222k in June. In addition, the unemployment rate for July, which reflects the percentage of people considered unemployed in the United States, is forecast to drop to 4.3% from 4.4% recorded a month earlier.
The Sterling pound fell materially after the Bank of England (BoE) voted 6-2 in favor of holding interest rates at their record lows and revised down its growth, wages and inflation forecasts. The BOE expects inflation to peak 3% in October. Bank of England (BOE) Governor Mark Carney specifically singled out the past decline in the sterling as the "sole cause" of the higher consumer price index (CPI). The Sterling pound fell as much as 1 cent vs. the Greenback to settle at $1.3113, its lowest level in three days. Against the common currency, Cable fell over 1% to a nine-month low to settle at 90.02 pence per euro.
The common currency continued to rally against its counterparts as final services PMI readings from Spain and Germany saw downgrades while Italy reported an upgrade. On tap, we have the Italian retail sales, the Germany factory orders and the regions PMI reports due today.
The Japanese currency took advantage of the weakness of its American peer even as Japanese cash earnings data came in weaker than expected. No reports are due from Japan today, so the currency may find its direction on the back of the NFP release and bond yields.
Gold prices settled on Friday, trading below Tuesday's seven-week high, as traders are awaiting Friday’s non-farm payroll report, for further clues on whether there will be another U.S. interest rate hike before 2017.Investors now only see a 35 percent chance of another rate rise by the end of 2017. Meanwhile, investors are pricing in roughly a 35 percent chance of a rate hike by year-end. Spot gold rose slightly by 0.15%, to settle at $1,268.15 not far from Tuesday's seven-week high of $1,273.97.
On Friday, Oil prices drifted lower, with U.S. crude oil remaining below $50 per barrel, negatively affected by increasing output from OPEC as well as the United States.
U.S. West Texas Intermediate (WTI) crude futures fell as much as 0.2% or 8 cents to settle at $48.95, from their last close, while Brent crude futures, settled at $51.93. Meanwhile, representatives from OPEC and non-OPEC nations are set to hold meetings in Dubai on August 7-8, chaired by Russia and Kuwait, to discuss production cut compliance.
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