Forex Today: US Dollar firms ahead of NFP, Oil surges amid Middle East war

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The US Dollar (USD) is being supported by crude oil prices, which rose to its highest level since July 2024, amid headlines of potential interruptions to the Strait of Hormuz and attacks on vessels in the region.

Here is what you need to know for Friday, March 6:

United States (US) President Donald Trump told Axios that he needs to be personally involved in selecting Iran's next leader, as he claimed that "Khamenei's son is unacceptable to me. We want someone who will bring harmony and peace to Iran." Mojtaba Khamenei has emerged as a frontrunner to succeed his late father as Iran's supreme leader after years spent forging close ties with the elite Revolutionary Guards and building influence in the clerical establishment.

The US Dollar Index (DXY) rises to the 99.20 price region as US employment-related figures indicated the labor market remains resilient. The Challenger Job Cuts report showed that US-based employers announced 48.307K job cuts in February, down 55% from 108.435K in January. Also, Initial Jobless Claims for the week ended February 28 rose by 213K, matching the previous reading but below the expected 215 K.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.50%	0.36%	0.43%	0.34%	1.31%	0.99%	0.46%
EUR	-0.50%		-0.13%	-0.05%	-0.16%	0.79%	0.49%	-0.05%
GBP	-0.36%	0.13%		0.06%	-0.02%	0.93%	0.60%	0.09%
JPY	-0.43%	0.05%	-0.06%		-0.10%	0.88%	0.54%	0.03%
CAD	-0.34%	0.16%	0.02%	0.10%		0.97%	0.65%	0.11%
AUD	-1.31%	-0.79%	-0.93%	-0.88%	-0.97%		-0.31%	-0.85%
NZD	-0.99%	-0.49%	-0.60%	-0.54%	-0.65%	0.31%		-0.53%
CHF	-0.46%	0.05%	-0.09%	-0.03%	-0.11%	0.85%	0.53%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

EUR/USD is trading near the 1.1580 price region, slipping during the American session after the European Central Bank (ECB) published the Monetary Policy Meeting Accounts, which showed that policymakers are relatively confident about the inflation trend, highlighting persistent uncertainty. Traders boost bets on an ECB rate hike to a 75% chance this year.

GBP/USD is trading near the 1.3330 level, resuming its downtrend after a one-day hiatus amid solid US employment data.

AUD/USD falls sharply to the 0.6990 price zone, as geopolitical fears push investors into safe-haven.

Gold is trading at $5,066, losing all its intraday gains as investors turn to the Greenback as a safe-haven.

What’s next in the docket:

Friday, March 6:

Germany January Factory Orders n.s.a.
Eurozone Employment Change (Q4).
Eurozone GDP (QoQ) (Q4).
US February Average Hourly Earnings.
US February Labor Force Participation Rate.
US February Nonfarm Payrolls.
US January Retail Sales.
US February U6 Underemployment Rate.
US February Unemployment Rate
Canadian February Ivey PMIs.

Gold FAQs

Why do people invest in Gold?

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Who buys the most Gold?

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

How is Gold correlated with other assets?

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

What does the price of Gold depend on?

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

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