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USD awaits Non-Farm Payrolls

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USD

The US dollar returned some of its recent wins when the ISM non-manufacturing PMI's jobs component and the ADP non-farm employment change hinted at a weaker NFP read. The US dollar returned some of its recent wins when the ISM non-manufacturing PMI's jobs component and the ADP non-farm employment change hinted at a weaker NFP read. Although the headline reading rose from 56.9 to 57.4 to reflect stronger industry growth, the jobs index fell from 57.8 to 55.8 to reflect a slowdown. The ADP figure came in at 158K versus 184K and the earlier reading was downgraded

Earlier this morning, the greenback rose against its rivals and was on track for weekly gains. Today, markets are looking ahead to the monthly U.S. employment data; as traders are expect U.S. employers to have added 179k jobs in July, above May's relatively small gain of 138k. Traders have to watch this release closely, a higher than expected reading should be taken as bullish for the USD, while a lower than expected reading should be taken as bearish for the USD.

  • The U.S. dollar index (DXY), which measures the Greenback against a basket of currencies, rose as much as 0.14% to settle at 95.94 pips at 08:47:00 GMT.

EUR

The euro edged higher yesterday, as minutes from the ECB's most recent meeting showed that officials’ policymakers are ready to a further step toward decreasing their monetary stimulus. The single currency settled at $1.1420, not far from 14-month highs of $1.1445 touched last week. German and French industrial production numbers are lined up today, along with Italian retail sales and the French trade balance, and strong readings could keep traders bullish on the shared currency.

GBP

The pound managed to hold on to its recent gains and go for more as another round of hawkish hints boosted rate hike expectations. UK manufacturing production data is due today and a 0.5% gain is eyed, higher than the earlier 0.2% uptick. Industrial production is expected to be up by 0.4%. The Halifax HPI is also due and a 0.2% uptick is expected.

JPY 

The yen had a mixed performance as it reacted to country-specific flows, giving up ground to European currencies while advancing against comdolls. Yen declined to an 8-Week Low vs. the Greenback Yen after the BOJ increased its purchases of the nation’s bond yields, expanding monetary policy. USD/JPY rose as much as 0.3% to settle at 113.60 after hitting 113.84, highest since May 15. There were no reports out of the Japanese currency yesterday, although it did draw safe-haven support due to the North Korean ICBM test launch. Japanese average cash earnings and leading indicators are due today.

Gold

Gold prices slumped early on Friday to hover around the lowest in nearly two months, as traders sought higher returns from a firmer U.S. dollar and rising Treasury yields and awaited for key US non-farm payrolls data. Spot gold declined by 0.3% to settle at $1,220.55. Moreover, U.S. gold futures for August delivery down by 0.3% to $1,219.90. Technically, a strong payroll figures could lead the yellow metal to decline into a range of $1,204 to $1,211.

Oil

Oil prices fell as much as 1%, as data from the EIA showed U.S. production increasing to 9.3 million barrels per day last week, up from 88,000 barrels per day earlier. Brent crude futures, declined by 1.3% or 61 cents, to settle at $47.50 by 06:38 GMT. Meanwhile, U.S. WTI crude futures fell by 58 cents or 1.3% to settle at $44.94.

The most important economic events:

  • USD Change in Non-farm Payrolls (JUN): (GMT 12:30) – Important – Forecast (178k) – Previous (138k).
  • USD Unemployment Rate (JUN): (GMT 12:30) – Important – Forecast (4.3) – Previous (4.3).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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