US Dollar retreats as Euro recovers from French political woes

LONDON (December 3) The US Dollar (USD) is paring back Monday’s gains, with the US Dollar Index (DXY) trading in the lower end of 106.00 on Tuesday, as traders take profits after the steep surge seen at the beginning of the week. The move comes even as investors remain on edge about the political situation in France,  with a motion of no confidence to be debated and voted on Wednesday.

If successful, it is unclear what will happen next as parliamentary elections cannot be held until next June. An option is that Macron appoints a new prime minister who could bring more stability. Still, this looks like a daunting task given the fragmentation of the current parliament.

The US economic calendar, meanwhile, is getting ready for the first key data point preceding the Nonfarm Payrolls release on Friday: the JOLTS Job Openings report for October. Markets will hear from Federal Reserve (Fed) officials as well, with three Fed speakers set to release comments after Federal Reserve Governor Christopher Waller said he is open to an interest-rate cut in December. 

Daily digest market movers: JOLTS as appetizer for Nonfarm Payrolls 

• The US JOLTS Jobs Openings report for October is due at 15:00 GMT. Expectations are for an uptick to 7.48 million job openings against the previous 7.443 million. 
• At 17:15 GMT, Federal Reserve Bank of San Francisco President Mary Daly is interviewed at Fox Business.
• Federal Reserve Governor Adriana Kugler delivers a speech about the labor market and monetary policy at an event organized by the Detroit Economic Club in Detroit near 17:35 GMT.
• Closing off near 20:45 GMT, Federal Reserve Bank of Chicago President Austan Goolsbee delivers closing remarks at the Wildwest Agriculture Conference organized by the Chicago Fed.
• Equities are surging across the board. Both Asia and Europe are seeing their indices tick up firmly, some of them over 1%. The German Dax even reached an all-time high of 20,000 points. US equity futures are lagging behind, still looking for direction. 
• The CME FedWatch Tool is pricing in another 25 basis points (bps) rate cut by the Fed at the December 18 meeting by 72.5%. A 27.5% chance is for rates to remain unchanged. The Fed Minutes and Waller’s recent comments have helped the rate cut odds for December to move higher. 
• The US 10-year benchmark rate trades at 4.21%, rather steady for a second day in a row. 

FXStreet