FxPro Forex Analysis: Markets stabilise ahead of US nonfarm payroll

Risk assets staged an impressive recovery yesterday with the Japanese Yen given back a little ground and for now the dollar march higher just seems to have halted whilst crude has stabilised around $50 a barrel. This could be the calm before the storm ahead of today’s first nonfarm payroll of the year with a headline figure expected to come in at 240k whilst the unemployment rate is due to tick lower to 5.7% from 5.8%. With a strong ADP private payroll on Wednesday the market expects a good number today and anything below the 240k could lead to a spell of profit taking in the US dollar. This may be more pronounced in those commodity currencies that have been beaten up so much in the past few months, namely the Norwegian krone and Canadian dollar.

Just recently USDNOK hit a twelve and a half year high whilst USDCAD recorded a five and a half year high, but with crude prices just finding a floor, for now those two rates have pulled back a little to 7.6310 and 1.1840 respectfully. One would not normally give Norwegian inflation data much attention but the release of CPI this morning should be given some notice with the core M/M figure due to dip into deflation territory. The Canadian dollar should also be monitored as they release unemployment data at the same time as the US where the rate is expected to hold steady at 6.6%.