US dollar maintains its weekly gains.
The US Dollar (USD) is seeing traders brace for the ultimate moment. That has kept every trading desk on edge all week. The monthly US employment report is expected this Friday. And it will either confirm or refute what prior figures this week have suggested. The US economy and job market are slowing.
There is a very narrow line here between slowing and stopping. Decreasing rather than contracting: predictions are that figures will remain positive. Pointing to economic expansion, but less convincingly than in prior months.
Expect practically every asset class to be frozen until the US Nonfarm Payrolls (NFP) report is issued at 12:30 GMT. Markets have already punished the US dollar this week, with a lower-than-expected Institute of Supply Management (ISM) Purchasing Managers Index (PMI) print for the Service sector and an ADP jobs report that fell short of expectations. The last few trading hours will be critical in determining if the US Dollar Index (DXY) can still scrape out a twelfth week of gains. The US employment report might just as well provide further Greenback weakness and put a stop to the rally. DXY is on a winning run.
The US dollar is under pressure.
The entire market is waiting until 12:30 GMT. Nonfarm payrolls are predicted to fall from 187,000 to 170,000 in September. The monthly print of Average Hourly Earnings is predicted to rise from 0.2% to 0.3%. The unemployment rate in the United States is predicted to fall from 3.8% to 3.7%.
The change in nonfarm payrolls is estimated to range between 90,000 and 250,000. To have a firm market moving figure, it must be either below 90,000 or greater than 250,000. Everything inside the range might imply that market swings are fleeting and reverse merely hours after the first move.
Equities are close to flat, with only Hong Kong’s Hang Seng index rising more than 1.5%. All Other indexes and futures are in the green or red by less than 0.5%.
According to the CME Group Fed Watch Tool, markets are pricing in an 81.5% possibility that the Federal Reserve will hold interest rates steady at its November meeting. This week’s economic data has almost eliminated the possibility of another raise.
The 10-year US Treasury yield is trading at 4.74%, down from this week’s high of 4.88%.
