Forex Today: Dollar ticks up after Trump’s TikTok move, all eyes on Non-Farm Payrolls

Here is what you need to know on Friday, August 7:

Trump’s executive order against TikTok and WeChat has dampened the market mood and strengthened the dollar. Fiscal stimulus have made limited progress and investors are now focused on July Non-Farm Payrolls, which carries high uncertainty amid the resurgence of coronavirus. 

Sino-American relations: President Donald Trump has signed an executive order which forced China’s ByteDance to divest TikTok – potentially selling the popular video network to Microsoft. The action move against WeChat – a major Chinese platform – could result in disallowing the app in the US. 

The White House’s action comes one week ahead of talks between trade officials, meant to take stock of the Phase One accord and as Trump trails rival Joe Biden in the polls.

The dollar has been rising across the board, including against gold, which is trading close to $2,050 after hitting $2,074.98 – a new all-time high. 

The US president also threatened to use an executive order to force an agreement on a fiscal relief package. Negotiations between Republicans and Democrats have made limited progress, one week after federal unemployment benefits expired. 

NFP uncertainty: The economic calendar is showing that Non-Farm Payrolls are set to show an increase of around 1.5 million jobs in July, but weak employment components in purchasing managers’ indexes and a downbeat ADP labor market figure have clouded the picture. The resurgence of coronavirus since mid-June has likely limited the drop in the unemployment rate as well.

See:

• Non-Farm Payrolls complicated by coronavirus and confusing data, dollar, gold implications

• Nonfarm Payrolls Preview: Hints point to an awful July

• US Non-Farm Payrolls July Preview: A dual track labor market or imperfections in the data?

GBP/USD is trading closer to 1.31 down from the highs closer to 1.32 recorded after the Bank of England painted a somewhat rosier picture of the recovery in the UK and pushed negative rates to the backburner. 

EUR/USD is hovering under 1.1850, partly impacted by rising COVID-19 figures in Germany, France, Spain, and other countries. 

Canada also publishes its labor figures for July, with another recovery on the cards. The northern nation gained 952,900 positions in June and a more moderate increase is now on the cards. 

See Canada Employment Change July Preview: USD/CAD action is south of the border

The US slapped new aluminum tariffs on Canada despite the USMCA trade deal. Canada’s Deputy Prime Minister Chrystia Freeland said that retaliation is on the cards. 

Cryptocurrencies are stable with Bitcoin around $11,200 and Ethereum around $400.

More Gold Price Analysis: Hits fresh record highs, key levels to watch ahead of NFP – Confluence Detector