The US dollar is struggling today, particularly against the euro, pound and Canadian dollar.
The pound is at a three-week high and looks to have carved out an inverted head-and-shoulders pattern.
GBP/USD daily
The dollar is weakening after a rise in initial jobless claims today but the bigger focus will be on tomorrow’s non-farm payrolls report and any signals from Fed officials ahead of Friday’s blackout, which begins at midnight.
The strongest signal we have heard so far is from the Fed’s Waller, who said he was ‘leaning’ towards a December hike but it would depend on upcoming data. He specifically cited non-farm payrolls as one of five indicators he’s watching but warned that it’s likely to be skewed by give-back from October strikes and hurricane impacts. The election could also skew the data.
At the moment, the market is pricing in a 70% chance of a cut on December 18, that’s down from 75% earlier this week but unchanged since Monday.
Aside from non-farm payrolls , there are scheduled speeches from the Fed’s Bowman, Goolsbee, Hammack and Daly on Friday.
There is also an element of risk appetite impacting the dollar. European shares are at records and bunds are selling off on talk of joint defense debt issuance.