⚡Crypto Alert : Altcoins are up 28% in just last month! Unlock gains and start trading now - Click Here

US Dollar Feels Some Pressure Ahead of NFP Release, Risk Sentiment Weighs

US Dollar Feels Some Pressure Ahead of NFP Release, Risk Sentiment Weighs

Posted Friday, October 8, 2021 by
Aiswarya Gopan • 1 min read

With all the focus on the upcoming non-farm payrolls data releasing today, investors have turned cautious towards the US dollar, hesitating to make moves and keeping it trading just below the highest levels seen since a year. At the time of writing, the US dollar index DXY is trading around 94.29.

After trading strong through the week, the reserve currency has also dipped slightly as the market sentiment improved, weakening its safe haven appeal. Earlier in the week, soaring energy costs and fears of their inflationary effects on global economic recovery had sent investors towards the safety of the dollar and supported it.

The market sentiment got a boost in the previous session after US Senate leaders worked together to approve a temporary lift to the debt ceiling, averting a potential debt default by the world’s most powerful economy. In addition, energy prices also eased lower, helping relieve some of the tension in global markets and driving rallies in riskier instruments, including equities.

The improvement in the risk appetite has also supported commodity currency AUD, sending it to the highest levels seen in three weeks against the USD in the previous session. Since then, in early trading, AUD/USD has been holding mostly steady just under this level.

The Sterling is also holding onto its gains from Thursday after the new BOE Chief Economist, Huw Pill, admitted that high inflation could last longer. This raised expectations that the central bank could consider increasing interest rates at least by early 2022 and possibly as soon as by the end of this year, supporting investors’ bullish mood towards GBP/USD

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments