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Forex today: Dollar gets whacked but bulls still prevail on 97 handle in DXY (Global growth fears take a grip)

[Published: 2019-03-08T22:35:55Z] [Author: Ross J Burland] [Powered by:]
Markets closed the week on a downbeat note with broad weakness across global equities. The forex space took the dollar down a peg, but not enough to cause the bulls to capitulate while holding on to the 97 handle and above the neckline support down at 96.60/70. Nonfarm payrolls were a big miss on the headline, but solid in the detail - US job growth came in 165k below expectations.

The USD traded on its back foot into the weekend with a broad decline against G10 FX, holding the 97 handle in the DXY while sterling 
was a major underperformer, propping up the index following Brexit headlines and no concessions from the EU on the Irish backstop ahead of next week's Parliamentary vote.

The headline nonfarm payroll number at +20K surprised sharply to the downside even as the blow-out January print was revised higher (to +311K). Weather distortions may be part of that story, in our view," analysts at TD Securities explained.

On the upside, the unemployment rate was down to 3.8% and household job growth was strong. Also, wages continue to trend higher with a solid +0.4% m/m increase printed in February which pulled the annual growth rate to a cycle-high of 3.4%.

However, all in all, the mood has been soured by global growth concerns following US and China trade data, gloom and doom ECB meeting and uncertainties over Brexit and trade wars between China and the US. For those reasons, April gold added $13.20, or 1%, to settle at $1,299.30/oz after briefly trading as high as $1,301.30, ending up 10 cents from the week-ago finish. On a spot basis, gold rallied to a high of $1,300oz from within the day's range of $1,285/00.80oz. 

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