US non-farm payroll and unemployment for March will be released this Friday at 13:30 BST.
In the past three days the dollar index has been oscillating in a range between 100.30 – 100.65 with the price edging up during the morning European session today. Please note that the release of US labour market data this afternoon will likely cause volatility for USD, USD crosses and commodities.
US unemployment has seen a downtrend since 2010 and has stabilised in a range between 4.6% – 5% since early 2016. The average revised figure of non-farm payrolls in the past 6 months has been around 183K which is close to the 180K estimate for March. If the upcoming NFP figure outperforms, or is in line with expectations, then we can expect a probable rate hike in June. However, if it is far below expectations, then it will likely lower the probability of a rate hike.
ADP employment change (March), regarded as the prediction of NFP, was 263k, better than expectations of 187K, seeing a peak since July 2014. Construction, manufacturing, mining, healthcare, catering, foreign trade and service sectors have seen noticeable job gains. Job creation in construction hit a record high last month.
Be aware that, according to past experience, market trends sometimes reverse within 1-2 hours after the initial move.
In the early hours of Friday morning, the US President Trump authorized a huge airstrike with 59 cruise missiles at a Syrian airfield, due to Syria’s use of banned chemical weapons that killed more than 100 people. The sudden military action pushed spot gold price up around 190 points, hitting a 5-month high of 1269.30.
We will see a series of crucial UK data for February released at 09:30 BST today including manufacturing production, industrial production and trade balance. Bank of England governor Carney will make a speech at 10:00 BST. GBP/USD is currently trading in a range between 1.2400 – 1.2500. Be aware that Carney’s speech will likely cause volatility for Sterling.
European Central Bank President Draghi made a dovish statement on Thursday weighing on the Euro. EUR/USD hit a 3-week low of 1.0628 on Thursday. Despite this the Eurozone economy is improving with the Eurozone composite PMI for March reaching a 6-year high of 56.7. Draghi stated that “the substantial monetary accommodation is still appropriate until the end of the year, as the bank has not yet seen sufficient evidence of an inflation pickup”.