Ella 
Here’s what you need to know on Monday, September 4:
The week started with a positive shift in risk sentiment, reflected in the impressive gains recorded by Asia’s major stock indexes on Monday. The European economic calendar will include September’s Sentix investor confidence data, with ECB President Christine Lagarde speaking during the US morning session. However, trading activity is likely to remain subdued in the second half of the session as U.S. and Canadian markets will be closed for the Labor Day holiday.
The U.S. dollar strengthened against its major rivals in late U.S. trading on Friday. The U.S. Dollar Index (DXY) ended the week barely above 104.00 after falling sharply in the first half of the week. In the European morning, the US dollar index fell slightly on the day.
U.S. nonfarm payroll employment increased by 187,000 in August, the U.S. Bureau of Labor Statistics reported on Friday. While the figure beat market expectations of 170,000, July’s figure was revised down to 157,000 from 187,000, making it difficult for the dollar to gain strength against its rivals in the first place. Other details in the report showed the unemployment rate climbed to 3.8% from 3.5% and the labor force participation rate improved to 62.8% from 62.6%.
Following the People’s Bank of China’s decision to cut the reserve requirement ratio ahead of the weekend to boost onshore dollar liquidity, news that embattled Chinese real estate developer Country Garden received creditor approval to extend the payment terms of its onshore private bonds helped. Market sentiment improved early Monday morning. Hong Kong’s Hang Seng Index rose more than 2% on the first trading day of the week, while the Shanghai Composite Index rose nearly 1.5%.
EUR/USD fell over 50 pips on Friday and ended the week in negative territory below 1.0800. The pair held its ground early Monday morning and moved back towards 1.0800. Earlier in the day, German data showed the country’s trade surplus narrowed to 15.9 billion euros in July from 18.7 billion euros in June.
GBP/USD posted strong gains in the first half of the week, but erased all those gains in two days of losses heading into the weekend. The pair held on to modest daily gains above 1.2600 in early European trade on Monday.
AUD/USD benefited from improving risk sentiment and started climbing towards 0.6500 on Monday. During Tuesday’s Asian trading session, the Reserve Bank of Australia (RBA) will announce its monetary policy decision. The Reserve Bank of Australia is widely expected to keep its key interest rate unchanged at 4.1%.
Gold struggled to maintain bullish momentum on Friday, but ended up posting gains for a second straight week. XAU/USD held steady above $1,940 on Monday.
USD/JPY rebounded on Friday on a surge in US yields, settling above 146.00 at the start of the week.
