Market positioning ahead of month- quarter- and year end could distort the moves in the market, but the politi-cal events in the US make the dollar lose its appeal further. Apart from the situation in the federal government, there are rising concerns over the Trump’s criticism of the Fed and its current policy that damages the markets, according to the US President. Against this backdrop, the buck loses its appeal as a safe haven, while positive developments in Italy only increase the pressure.
On Friday, the US releases the key labor market data that could affect the short-term dynamics in the dollar pairs but will hardly change the market sentiment dramatically. Strong numbers may lift the USD across the board but there is a risk of profit-taking in this scenario as traders get disappointed in the US currency as a safe haven bet.