From Marc Chandler at Bannockburn Global Forex:
Overview: After rallying last week, the US dollar pulled back today, though is mostly consolidating within the range set last Thursday and Friday. The Japanese yen is the exception among the G10 currencies and is heavier against the greenback despite Bank of Japan Governor Ueda's reiteration of plans to raise rates if the economy and prices evolve as expected. Among emerging market currencies, central European currencies are leading the way higher. A few Asia Pacific currencies are trading heavier, including the Chinese yuan and Indian rupee.
Most of the large equity markets in Asia Pacific region were lower, but Taiwan and South Korean markets were notable exceptions with 2.8% and 1.9% gains, respectively. The Nikkei lost about 1.5%, while China's CSI 300 settled slightly lower. Australia and New Zealand equities eked out a small gain. Europe's Stoxx 600 is slightly firmer after losing nearly 0.5% before the weekend. Meanwhile, the NASDAQ futures are around 0.70% higher and the S&P 500 futures are up nearly 0.50%. Gold trading at a two-and-a-half week high (~$2665.3) ahead of the weekend but is trading heavier today to approach the January 2 low near $2621. Trendline support is around $2600. February WTI rally 4.75% last week to $74.25, its best level since early October. It made a marginal new high today but is consolidating and straddling the $75 area.
USD: The US dollar is trading heavily today as some of last week's gains are pared. The week's highlight is the employment report on Friday. The median forecast in Bloomberg's survey is around 160k. As Fed Chair Powell acknowledged that officials recognize that jobs growth has been overstated. Benchmark revision could reduce the average monthly rise by as much as 100k, according to some projections. The FOMC minutes due Wednesday may shed some light on what appears to have been the Fed's pivot back to emphasizing its price stability mandate. A poor employment report may challenge that. The final services and composite PMI will draw little attention, and the final reading of durable goods may see the 1.1% drop pared. The Dollar Index is within the January 2 range (~108.25-109.55) Treasury kicks off the year with the $119 bln sale of coupons with $58 bln in three-year notes today and $156 bln in bills.EURO....
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