US stocks, cryptocurrencies, and precious metals fell on Thursday as investors began adjusting to upcoming interest rate increases. The Dow Jones fell about 170 points while the Nasdaq 100 and S&P 500 rose marginally. This sell-off was mostly a reaction to the hawkish Fed minutes. The argument is that assets that have done well in a period of low interest rates will be delayed when the Fed begins its hiking cycle. Meanwhile, data showed that the US service sector slowed in December as the Omicron variable spread. The ISM Non-Manufacturing PMI fell from 69.1 in November to 62.0 in December.
The US dollar settled as investors waited for the upcoming US jobs numbers due later today. Economists polled by Reuters expect data to show that the country’s employers added about 400,000 jobs in December while the unemployment rate slipped to 4.1%. On Wednesday, data from the ADP revealed that the country’s private sector added 800,000 jobs. The Labor Department said Thursday that initial jobless claims rose slightly to 207,000 last week. The strong job numbers will prompt the Fed to start tapering off.
The Canadian dollar strengthened against the US dollar after the latest Canadian trade figures. According to the country’s Commerce Department, exports increased from C$56.42 billion in October to C$58.57 billion in November. In the same period, imports rose to C$55.44 billion, resulting in a total trade surplus of C$3.13 billion. These numbers show that the country’s economy is doing well. Later today, the statistics agency will publish the latest job data. Economists expect data to show that the nation’s unemployment rate fell from 6.0% to 5.9% in November.
EUR / USD
EURUSD was little changed ahead of the recent Eurozone inflation data and US non-farm payrolls data. It is trading at 1.1296 where it has been for the past few days. This price is slightly lower than the upper side of the horizontal channel shown in red. It is also located along the 25-day and 50-day moving averages and slightly below the 23.6% Fibonacci retracement level. Therefore, the pair is likely to remain in this range before the NFP data.
US dollar / Canadian dollar
The USDCAD pair moved sideways ahead of the latest US and Canadian jobs numbers. It is trading at 1.2753, which is higher than this week’s low of 1.2620. The pair also moved slightly above the 25 and 50 day moving averages. It has formed a rising channel that appears in red. It also formed a head and shoulders pattern. Therefore, there is a possibility that it will decline and retest the support at 1.2620.
XTI / US dollar
The XTIUSD pair rose to a high of 79, the highest since November 17. It is also above the major support level at 77.15 and the Parabolic SAR. It also rose above the 25-day moving average while the Relative Strength Index (RSI) is slightly below the overbought level at 70. Therefore, the pair is likely to continue rising as the bulls target the major resistance at 78.