Pay-roll day
Economists expect the headline figure to show the US economy added 200,000 jobs in the month of March after adding 275,000 in February. If the real figure is substantially above this – by a margin of more than 10%, say – it is likely to pressure the DXY higher.
Positive employment growth in the US, which already has a relatively tight labor market, will suggest upward pressure on wages and higher inflation. Higher inflation means the US Federal Reserve (Fed) will have to keep its main interest rate, the Fed Funds Rate, at its current relatively high (5.5%) level for longer. Higher interest rates are positive for the US Dollar since they attract greater inflows of foreign capital.
Another important metric within the NFP report is Average Hourly Wages, since this more directly impacts inflation expectations. If this metric rises more than forecast it will push up DXY and the opposite if it falls. In the last report wages rose 4.3% YoY and expectations are for a drop to 4.1%.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.