USD Weakens Ahead of NFP, Gold Gains More Than 1%

Market Wrap-up: Markets Extend Gains as Yields Ease Ahead of NFP 

Most markets extended their gains in the latest session as US Treasury yields eased from recent highs.

US equities continued to advance, with the S&P 500 rising 1.06% and the Nasdaq Composite gaining 1.40%. The Dow Jones Industrial Average climbed 1.18%, marking its strongest session since 4 August.

The 10-year US Treasury yield stood at 4.77%, down from recent highs after Fed Governor Christopher Waller said he would favour keeping rates unchanged if upcoming data confirm continued progress on inflation. 

Markets will now look to today’s Non-Farm Payrolls (NFP) report for further clues on the Fed’s policy outlook.

Treasury yields moved lower, while the US dollar fell to its weakest level in more than a week, breaking below the 99.00 support level.

The Japanese yen strengthened as markets adjusted towards a tighter Bank of Japan (BoJ) policy outlook. Traders are currently pricing in the possibility of a 25 basis point (bps) rate hike at the 17 to 18 September meeting, with another increase also seen as possible in December.

Spot gold rose 1.2% to $4,437.08 an ounce alongside a weaker US dollar.

In energy markets, oil prices were broadly unchanged on Thursday. Brent crude fell 11 cents to $95.52 a barrel, while US WTI rose 29 cents to $91.30 a barrel.

Senior officials in US President Donald Trump’s administration are seeking to contain the conflict with Iran ahead of the November 2026 midterm elections. President Trump also indicated on Wednesday that he does not expect the current hostilities to develop into a renewed war.

Iran, however, continued attacks on US allies in the Gulf, with Kuwait intercepting missiles and drones.

Meanwhile, shipping data provider Kpler reported that only five vessels passed through the Strait of Hormuz on Monday, a small fraction of the average of 130 vessels that travelled through the waterway before the war began.

Looking ahead, markets will focus on the US Non-Farm Payrolls report, Unemployment Rate and Average Hourly Earnings data.

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DXY:

Key takeaway:

• DXY fell to its lowest level in more than a week as Treasury yields eased.
• Fed Governor Waller favoured keeping rates unchanged at the upcoming meeting, while attention now turns to today’s NFP report.

Technical Outlook:

• Daily Bias: Bearish

• Support: 98.83   
• Resistance: 99.10   

Gold:

Key takeaway:

• A softer US dollar and lower Treasury yields supported gold, which rose 1.2% to $4,437.08/oz.
• Expectations that the Fed could keep rates unchanged also provided a more favourable backdrop for the non-yielding precious metal.

Technical Outlook:

• Daily Bias: Bullish
• Support: 4,419  
• Resistance: 4,510

Oil:

Key takeaway:

• The Trump administration is seeking to contain further conflict with Iran ahead of the midterm elections, while Iran continues attacks on US allies in the Gulf.
• Oil flows through the Strait of Hormuz remain subdued, while falling US inventories have added to the market’s focus on supply conditions.

Technical Outlook:

• Daily Bias: Bullish

• Support: 88.97  
• Resistance: 93.17 

Japanese Yen:

Key takeaway:

• Expectations of BoJ rate hikes in September and December continue to support the yen.
• A weaker US dollar has also contributed to further downside in USD/JPY.

Technical Outlook:

• Daily Bias: Bearish with Rebound Potential

• Support: 155.30  
• Resistance: 158.20  

Calendar Watch:

• US Non-Farm Payrolls (NFP)
• US Unemployment Rate
• US Average Hourly Earnings

The data will offer fresh clues on the Fed’s September policy stance and the broader US rate outlook.  

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