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Talking Points:

• US Dollar may rise as upbeat jobs data boosts Fed outlook

• Aussie Dollar down on risk trends despite upbeat sales data

• British Pound continues to rise on hopes for “soft” Brexit

A lackluster offering of scheduled event risk in European trading hours is likely to see markets looking ahead to November’s US labor-market data for direction. The report is expected to show that the economy added 180k nonfarm jobs last month, marking a bit of a pickup from October’s 161k increase but generally registering in line with near-term trend averages.

US news-flow has steadily improved relative to consensus forecasts since October, suggesting analysts’ models may be underestimating the economy’s vigor and opening the door for another upside surprise. Such an outcome may translate into further steepening of the Fed interest rate hike path projected for next year, sending the US Dollar broadly higher.

The Australian Dollar underperformed in otherwise quiet overnight trade. The currency enjoyed a bit of a lift following better-than-expected retail sales figures but risk trends soon reasserted control, with the sentiment-linked unit falling alongside Asian share prices. The MSCI Asia Pacific equities benchmark fell as regional bourses followed Wall Street downward.

Meanwhile, the British Pound continued to push higher. The move may amount to follow-on momentum after the tone of Brexit negotiations turned surprisingly friendly yesterday. This stocked hopes for a “soft” separation, cheering investors worried that bitter feelings on the Continent and a prickly posture across the English Channel will carry negative long-term implications for regional growth.

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Asia Session

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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com