The Dollar Stabilizes After NFP as Oil Price Slumps

The US dollar has stabilized amid low liquidity conditions Monday. It came as the aftermath of the US NFP non-farm payroll report. The dollar moved in both directions on Friday, initially rebounding strongly due to the upbeat US unemployment rate and wage growth data. However, the dollar turned lower and returned gains heading into the weekly close as US stocks rallied.

The Asian stock markets have moved mostly mixed forming as the closure of Wall Street cautious and fiscal stagnation in the US have offset optimism about the jump in the Chinese trade surplus and export data. Chinese stocks have also been weighed down by the sell-off in Semiconductor Manufacturing International Corporation (SMIC) shares following news that the United States is considering imposing controls on the Chinese state-owned company, escalating the Sino-US tech war.

GBP/USD dropped to 1.3200

Concerns about the no-deal Brexit intensified over the weekend. They have hurt the British pound, with the GBP/USD falling towards 1.3200. UK Prime Minister Boris Johnson has set October 15 as the deadline for reaching the Brexit deal or “going ahead.”

According to a Financial Times, the UK plans legislation that will overturn critical parts of the Brexit withdrawal agreement. At the same time, the European Union stands firm on its lawsuit over fishing rights, immigration, and state aid.

The EUR/USD moves defensively below 1.1850, as investors remain cautious amid rising coronavirus cases in Europe and before the monetary policy decision of the ECB on Thursday. The immediate focus of attention now remains on German industrial production and Eurozone Sentix investor confidence.

The USD/JPY remains stable above 106.00, while the rebound in the AUD/USD has remained limited below 0.7300 despite upbeat Chinese commercial data.

The USD/CAD rose to 1.3100, backed by the falling prices of the WTI. US oil is down more than 1.50% to fresh two-month lows just above $38.50. Saudi Arabia’s oil price cut, combined with falling Chinese oil imports, has weighed on black gold.

The gold is healing its wounds and keeps the range below $1,950.

The cryptocurrencies have started the week with a negative tone. Bitcoin is defending the $10,000 level.