Dollar finishes week in a defensive position, being under pressure from the protectionist rhetoric trump and newpictures markets of the meeting of the Federal reserve, which hinted that in March, do not expect a rate hike. As a result, EUR/USD has updated a nearly two-month highs above the 1.08 level, and the USD/JPY touched lows of late November in the area 112.00.
Today the currency will be the last hope for statistics on the labour market. The preconditions for the release of a strong figure that would have exceeded expectations at the level of 175 thousand, is. The ADP report this week reflected the growth of private sector employment to 246 thousand, which was the highest reading since June last year. In addition, the employment component in the manufacturing ISM peaked in 2014, and applying for unemployment benefits fell last week by 14 thousand to 246 thousand so that the NFP figure could reach 200 thousand, or even higher.
But the question is whether in this case the result is to determine the steady recovery of the dollar, not only the initial positive reaction? Rather no than Yes. First, markets are now more important than the position of the fed, which hinted that while it will wait for signals from trump in terms of his economic policy. And secondly, not much attention will draw data on salaries. Here growth is expected to slow average hourly earnings of 0.4% to 0.2%. And if the release is to confirm the expectations, it will be another argument in favor of the fact that the Federal reserve will not hurry.
Accordingly, even in the case of a strong core of employment, do not expect a strong rally of the dollar given the risk in the aspect of wages and the General negative tone set by the Central Bank. In addition, market participants are now wary of entering a long USD position, allowing a new portion of verbal intervention trump and his administration.