Forex Today: US Dollar retreats following NFP-inspired rally

Here is what you need to know on Monday, November 9:

The US Dollar (USD) loses strength early Monday following the bullish action seen at the end of the previous week. The European economic calendar will feature Sentix Investors Confidence data for November. Later in the day, several policymakers from the Federal Reserve (Fed) are scheduled to deliver speeches. On Tuesday, October Consumer Price Index data from the US could ramp up the market volatility.

The US Bureau of Labor Statistics reported on Friday that Nonfarm Payrolls (NFP) rose by 165K in October. This print followed the 60K increase recorded in September (revised from 29K) and surpassed the market expectation of 65K by a wide margin. Moreover, the Unemployment Rate declined to 4.1% from 4.2% in this period, while the Labor Force Participation Rate improved to 61.9% from 61.8%. With the immediate reaction to upbeat labor market data, the USD Index gathered bullish momentum and gained about 0.7% on the day. In the European morning on Monday, the USD Index corrects lower but manages to hold slightly above 102.00.

Improving risk mood at the beginning of the week seems to be making it difficult for the USD to continue to outperform its rivals. US President Donald Trump said fresh attacks on Iran were “highly unlikely” if negotiations to end the conflict continued to progress, CNN reported. Trump is expected to meet with Qatar's Prime Minister later in the day to discuss a new ceasefire and resuming nuclear talks. Meanwhile, Saudi Arabia said a Saudi Aramco administrative building in Riyadh was damaged by falling debris following an attempted attack, and the Saudi-led coalition claimed to have intercepted two ballistic missiles and two cruise missiles targeting the kingdom. Oil prices edge lower early Monday, with the barrel of West Texas Intermediate losing about 1% on the day.

Reflecting the positive shift in market sentiment, US stock ndex futures trade in positive territory, with the Dow Futures leading the day with a 0.7% gain at the time of press.

EUR/USD fell nearly 0.7% on Friday and erased its weekly gains. Early Monday, EUR/USD clings to marginal recovery gains above 1.1150.

Gold registered losses on Friday but rose nearly 5% for the week. The precious metal gains traction to start the new week and trades above $4,100, up about 1% on the day.

Gold’s resilience hints at returning safe-haven appeal

Analysts at OCBC highlight that Gold’s performance has been notable in recent sessions, with “Gold’s relative resilience despite the sharp equity selloff” seen as “encouraging.” They argue that, following the recent correction and a reduction in speculative positioning, “Gold may be gradually regaining some of its safe-haven appeal, potentially providing shelter amid turbulence elsewhere in financial markets.” However, OCBC cautions that “the extent to which Gold can hold up if equity weakness persists will be an important test,” suggesting that the durability of this renewed safe-haven bid will hinge on how risk assets trade in the days ahead.

GBP/USD gathers recovery momentum and rises toward 1.3400 early Monday after having closed in negative territory for two consecutive days. Later in the day, Bank of England Governor Andrew Bailey will speak at the Swiss Institute of International Studies Lecture Series and Dinner at the University of Zurich in Switzerland.

USD/JPY gained about 0.5% on Friday to end the previous week in the green. The pair struggles to keep its footing and declines toward 158.00 in the European morning.