IFX Market Report: Friday 4th September 2020

As we approach into the weekend all eyes are on US data, with the highly anticipated Non-Farm Payrolls (NFP) being released this afternoon. The previous figure for last month was 1763K jobs added, this month’s forecast is 1400K. Despite the forecast being lower, 1400K jobs added to the economy is still a significant achievement in the current COVID-environment and would be representative of what the US economy wants to see in regard to its economic recovery.

At 13:30, along with NFPs, the US Unemployment report will also be published. The headline figure is expected to come in at 9.8%, as opposed to last month’s 10.2%. Moving into single figures in unemployment will please many in US, but if the details of the report show weak spots in labour force, the reading will do little to stimulate price action.

If the NFP and Unemployment come out today as expected, it will likely give a short-lived boost to the USD, extending into the weekend; however, if the readings fall short of estimates, this will weigh heavy on the dollar and likely enable EURUSD to extend its recovery.

After reaching highs of 2018 early in the week, EURUSD has taken a mighty hit, deprecating all the way back down to 1.18. Now it would appear the pair is on the rise again. Amid anticipation for the NFP release, EURUSD was able to test 1.1860 yesterday but unable to sustain itself at that level. As we go into the session this morning, the pair is trading strong, and if any dollar weakness becomes apparent, will likely take full advantage. The pair opened yesterday at 1.1801, before closing off at 1.1829.

As more negative news about Brexit came out yesterday, we saw cable back in the 1.32’s after a positive start to the week. After nearly reaching the 1.35 mark on Tuesday, the pair opened the session at 1.3287 and was on a downward trend for most of the trading day, finishing off the session at 1.3262.

As for GBPEUR – the pair also lost some standing yesterday, opening the session at 1.1250, depreciated over the course of the day at closed at 1.1212.

On the data front, other than data from the US (already discussed), we have UK Construction PMI and a speech from the Bank of England’s Michael Saunders.

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