The business week finishes today for many ahead of the extended Easter week end, however nonfarm payrolls are still to be released tomorrow. Yesterday’s ADP private payroll did little to boost the dollar as it came in less than expected and the euro continues to hold ground against most other currencies, with EURUSD recapturing the 1.0800 level trading at 1.0815. The Aussie however continues to struggle with AUDUSD now back below 0.7600 at 0.7585 at the time of writing with pressure coming from ever lower iron ore prices and the prospect of a rate cut from the RBA next week.
The overriding theme in the financial markets is that US data is giving mixed signals about the state of the US economy as only this week we’ve seen better than expected consumer confidence but the worse than expected manufacturing data and that disappointing ADP number. This leaves investors second guessing when the Federal Reserve will first hike rates and makes it hard to see any move coming early in the summer. The dollar looked like it was re-establishing its upward momentum but this has not materialised and in the absence of any major data releases today, focus will be on tomorrow’s nonfarm payroll which is expected to come in at 244k, a drop from the previous month’s 295k. This is yet another important figure which could lead to considerable volatility across all markets, in particular FX which remain open, and determine the path of the dollar for the next few months.