The Bureau of Labor Statistics (BLS) will issue Nonfarm Payrolls (NFP) statistics on Friday at 13:30 GMT. The NFP report is projected to reveal 205,000 job growth. Yet, another good surprise cannot be ruled out, which might fuel the US Dollar’s continuing ascent (USD). After Chairman of the Federal Reserve (Fed) Jerome Powell’s aggressive statements in his bi-annual testimony earlier this week, the US Dollar grabbed a new buy wave and began its rebound.
“If the totality of the evidence indicates that greater tightening is necessary. We would be prepared to accelerate the pace of rate rises,” he added. He also stated that the “final level of interest rates” is likely to be higher than previously predicted. While this supports the resurgence of US Dollar demand, additional gains are contingent on another high Nonfarm Payrolls headline data.
NFP releasing time and how it will affect EURUSD
The Nonfarm Payrolls data is set to be released on March 10 at 13:30 GMT. The EURUSD pair is languishing at weekly lows below the 1.0600 psychological barrier, despite the US Dollar achieving a new three-month high due to increased expectations for a 50-basis point (bps) March Fed rate hike. Higher US job data should lend more legs to the USD’s continued gains, pushing the key pair deeper into losses.
A weaker-than-expected NFP print, on the other hand, might cause the USD to fall sharply, as it would deflate expectations of more Fed rate rises and a higher terminal rate in the future.
The market repricing of the Fed rate rise expectation might reintroduce negative positions in the US Dollar, triggering a possible reversal.
Nonfarm Payrolls data impact on Gold.
Analysts predict that the US economy will add 205K jobs in February. Up from the stunning 517K job increases reported in January.
If the US NFP exceeds forecasts, the US Dollar may receive a much-needed lift in order to restart its rise versus its main competitors, putting the gold market back in the hands of bearish. Wage growth will also be a focus, especially with the US Consumer Price Index (CPI) running hot and raising expectations of aggressive Federal Reserve tightening.
Nonfarm Payrolls data impact on USD
The US dollar, as measured by the DXY index, fell slightly. But stayed near three-month highs, in a day marked by violent swings across asset classes. And a strong decline in US bond rates ahead of nonfarm payrolls data. The February employment survey is expected to reveal a slowing in hiring. With experts expecting a rise of 205,000 jobs following January’s astonishing 517,000 increase. The Fed has suggested that its terminal rate is likely to be higher than expected. And that the bank is willing to increase the pace of tightening if the totality of incoming data warrants it. Because of this data-dependency bias, NFP figures will be especially important, helping to set the tone for the rest of the year.
