Forex Today: US Dollar consolidates losses in quiet start to the week

Here is what you need to know on Monday, November 6:

Financial markets started the new week in a quiet manner. After falling more than 1% in the previous week, the US Dollar (USD) Index stabilized near 105.00 early Monday and the benchmark 10-year US Treasury bond yield recovered toward 4.6%. Sentix Investors Confidence data for November will be featured in the European economic docket. The US calendar will not be offering any high-impact data releases later in the day.

Nonfarm Payrolls in the US rose by 150,000 in October, the US Bureau of Labor Statistics (BLS) reported on Friday. This reading came in below the market expectation of 180,000 and pointed to loosening conditions in the labor market. Consequently, the USD continued to weaken against its major rivals ahead of the weekend and risk flows dominated the action in financial markets on growing expectations of the Federal Reserve holding the policy rate steady in December. Early Monday, US stock index futures trade slightly higher on the day.

Meanwhile, the Israel Defense Forces said over the weekend that operations against "Hamas’ leadership and infrastructure in northern Gaza" will continue. 

EUR/USD gathered bullish momentum and climbed to its highest level in nearly two months above 1.0700 on Friday. The pair seems to have gone into a consolidation phase slightly below 1.0750 early Monday. The data from Germany showed that Factory Orders increased by 0.2% on a monthly basis in September, better than the market expectation for a decrease of 1%.

GBP/USD gained nearly 200 pips on Friday and continued to inch higher toward 1.2400 on Monday.

Bank of Japan (BoJ) Governor Kazuo Ueda said on Monday that they need to have more conviction that wages will keep rising. "Rising wages lead to service prices and the economy remains strong, to ponder exit from easy policy," Ueda explained. USD/JPY showed no immediate reaction to these comments and the pair was last seen moving sideways at around 149.50.

During the Asian trading hours on Tuesday, the Reserve Bank of Australia (RBA) will announce monetary policy decisions. Additionally, October Trade Balance data from China will be watched closely by market participants. Ahead of these events, AUD/USD stays relatively calm at around 0.6500.

The improving risk mood made it difficult for XAU/USD to benefit from falling US bond yields and the broad-based USD weakness on Friday. Gold started the new week on the back foot and declined toward $1,980.