Dollar is facing accelerated selloff following the release of disappointing ADP private employment data, which showed deceleration in both job and pay growth. Although the employment numbers were by no means dismal, the cooling job market is being perceived as a positive development by Fed and market participants. This perception stems from the notion that slower job market could potentially ease the need for further monetary tightening. Subsequently, benchmark US Treasury yields tumble, indicating reduced expectations for more interest rate hikes. As Dollar weakens, a fierce competition is shaping up among other major currencies, notably Euro, Sterling, Aussie, and Kiwi. Currently, Australian dollar has an edge, but Euro could mount a challenge, especially as the market anticipates Eurozone CPI flash report due tomorrow. The data will likely serve as a critical test for the common currency's resilience. From a technical standpoint, Gold is capitalizing on Dollar's weakness. The precious metal's rally from 1884.84 extends further today. Immediate attention is now on the trend line resistance, currently situated at 1948.07. Sustained break above this level would bolster the argument that entire correction from 2062.95 has concluded with a three-wave drop down to 1884.83. Further rally would then be seen to 1987.22 resistance for confirmation. For now, further rise will remain in favor as long as 1923.19 minor support holds, in case of retreat. In Europe, at the time of writing, FTSE is up 0.35%. DAX is down -0.06%. CAC is up 0.14%. Germany 10-year yield is up 0.029 at 2.541. Earlier in Asia, Nikkei rose 0.33%. Hong Kong HSI dropped -0.01%. China Shanghai SSE rose 0.04%. Singapore Strait Times dropped -0.09%. Japan 10-year JGB yield rose 0.0093 to 0.656. |
