Dollar rises on Fed rate cut bets, focus turns to non-farm payrolls data

The U.S. dollar (USD) outperformed rivals midweek, with minutes from the Federal Reserve's (Fed) October policy meeting fueling expectations for December policy holdings. The dollar held steady early on Thursday as investors awaited the September jobs report, which will release non-farm payrolls and unemployment data.

The Fed said in the minutes of its October meeting that many policymakers believe it is appropriate to keep interest rates unchanged throughout the year in their outlook. "Most participants noted that further rate cuts could increase the risk of higher inflation becoming entrenched, or be misinterpreted as insufficient xm-bx.commitment to the 2% inflation target," the publication wrote. The U.S. dollar index rose in late U.S. trade, climbing to a two-week high above 100.00. Early Thursday, the U.S. dollar index held modest gains near 100.30.

Meanwhile, U.S. stock index futures rose sharply in the European morning as investors cheered Nvidia's earnings report, which showed better-than-expected third-quarter revenue and stronger-than-expected fourth-quarter sales forecasts. As of press time, Nasdaq futures were up nearly 2% on the day.

Basic trends in the foreign exchange market:

EUR/USD fell nearly 0.4% on Wednesday, closing in negative territory for the fourth consecutive day. The pair remains on the back foot early Thursday morning, heading towards 1.1500.

The pound fell sharply against the dollar on Wednesday, closing below 1.3100 for the first time since early November. The pair struggled to rebound on Thursday morning in Europe, with prices trading in a tight range just above 1.3050.

USD/JPY’s bullish rally began in the U.S. session on Wednesday and continued its gains in Asia on Thursday. This currency pair was last traded since 1The highest point since mid-month is over 157.50, with a weekly increase of about 2%. Japan's Chief Cabinet Secretary Minoru Kihara issued a statement on Thursday saying that he is paying close attention to trends in the foreign exchange market.

Bulk market fundamentals:

Gold was slightly lower in early European trading on Thursday, slightly above $4,050.

Analysis of major currency trends:

European: The breakout of 1.5610 support by EURUSD indicates that the recovery from 1.1467 has been xm-bx.completed at 1.1655. More importantly, the decline from the 1.1917 level is still ongoing. The intraday deviation fell back at the top of 1.1467. A strong breakout here will target 1.1390, followed by a 38.2% retracement of 1.0176 to 1.1917, at 1.1252. For now, as long as the 1.1655 resistance level holds, risks will continue to move lower to prevent a recovery.

GBP: GBP/USD fell further today but remains above the 1.3008 support level. The intraday bias remains neutral, with the outlook unchanged. As long as the support of 1.3247 turns to resistance, further decline is expected. A breakout of 1.3008 will continue the pullback from 1.3787, targeting 138.2% of the 1.3787 forecast, down from 1.3725 to 1.2831 to 1.3140. Nonetheless, a solid break above 1.3247 indicates that the decline from 1.3787 is xm-bx.complete as a corrective move.

JPY: USD/JPY accelerated its rise today, with the intraday bias remaining upward, with 158.85 being the key structural resistance, followed by 161.8% of the forecast for 146.58 to 153.26, from 149.37 at 160.17 to 153.26. On the downside, a break below the minor support at 155.72 will bias the market toward neutrality and bring about consolidation, followed by another rise.

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