Forex: The NFP data for February will enhance market volatility. As traders wait for the Feb US employment report, which could have a significant impact on the forecast for the US Federal Reserve’s rate.
Forex market seeing US dollar stable
Following Thursday’s drop, the US Dollar Index remains stable above 105, while US market index futures are trading in the red.
In addition, Statistics Canada will present results on the job market for Feb. Christine Lagarde, president of the European Central Bank (ECB), will speak later in the day.
Forex markets weigh T- yields and initial jobless claims
According to information released by the US Department of Labor on Thursday, initial jobless claims for the week ending March 4 increased by 21,000 to 211,000.
Economic Activity Schedule
Although the market was risk-averse, the US Dollar had trouble finding buyers during the American session. The standard 10-year US Treasury bond yield fell more than 2 percent on the day. Which added to the USD’s ongoing decline against its main competitors.
The 10-year US T-bond yield began to decline early on Friday and was last seen down more than 2 percent on the day at 3.82%. But for now, the Dollar continues to be strong.
Source: Bloomberg
After an impressive growth of 517,000 in Jan. NFPs are expected to increase by 205,000 in Feb. The average hourly earnings, which serve as a proxy for salary growth, are expected to increase slightly to 4.7% from 4.4% in Jan.
Forex scenario in review
EUR
After recovering on Thursday, the EURUSD trades up and down in the European morning in a small band. Just under 1.0600. Given that the ECB is already in the “silent phase,” Lagarde is unlikely to make any comments about the policy outlook later in the day.
GBP
After the UK’s Office for National Statistics reported that the real GDP increased by 0.3 percent in Jan. Beating the market estimate of 0.1%, GBPUSD is trading marginally higher on the day near 1.1950 early on Friday. Adversely, Manufacturing Output and Industrial Production declined by 0.4 percent and 0.3%, respectively, during the same time frame.
YEN
Following the final policy conference chaired by departing Governor Haruhiko Kuroda, the BoJ maintained its current policy settings. Kuroda reiterated in the press conference that they won’t be afraid to relax the monetary policy further if necessary. But the market did not respond in a significant way to his words. At the time of publication, the USDJPY rate was at 136.40, up a little bit on the day.
CAD
The USDCAD currency pair kept its weekly rise on Thursday, before reaching its best point since Oct on Friday at 1.3850. Before falling to 1.1830. Now with Total Change in Employment coming in at +10K. It is anticipated that the Canadian Unemployment Rate will edge up to 5.1% in Feb from 5% in Jan.
