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US Forex Markets Nervous as Jobs Data Looms

The US dollar hovered as trading began on Friday, with traders bracing themselves for a significant data release later in the day.

At 12.30pm GMT, data on nonfarm payrolls and average hourly earnings, as well as average weekly hours and the overall unemployment rate, for September will come out.

Analysts expect that average weekly hours will remain the same, although nonfarm payrolls are expected to drop from 201,000 to 185,000.

The overall unemployment rate, meanwhile, is expected to go down from 3.9% to 3.8%.

As a result of nerves around the release, the dollar index, which measures the greenback’s relative performance compared to other currencies, went up, but only by the negligible amount of 0.1% to 95.804.

Data releases like these are significant in themselves, as they indicate the general health of an economy. However, they are particularly significant for forex traders as they act as potential indicators for future central bank monetary policy activity.

In this case, indicators of an economic upturn could mean that the Federal Reserve will decide to raise interest rates yet again before the year is out.

Looking ahead to a new week in the forex markets from Monday, there’s a lot scheduled on the calendar.

Monday begins with a number of North American holidays, including Columbus Day in the US and Thanksgiving Day in Canada. As a result, markets in these locations may be a little slower than usual.

Other countries, however, will be active. In China, the September purchasing managers’ index for services in September will be out at 1.45am GMT, while the foreign exchange reserves data for September is also expected.

German industrial production figures for August will come out at 6am GMT, and analysts expect that the month on month change will show a rise from -1.1% to +0.5%.

The day will end with some significant Japanese trade balance figures for August at 11.50pm GMT.

On Tuesday, the National Australia Bank will release its business confidence and conditions survey results for September.

German trade balance information including imports and exports will come out at 6am GMT, while Canadian housing starts information is expected at 12.15pm GMT.

The European Central Bank will meet on Wednesday at 7am GMT, although this will be a non-monetary policy meeting.

It will be followed at 8.30am GMT by lots of British data releases, including industrial production information for August. The month on month change here is predicted to hold firm at 0.1%, the same position at which it was last recorded.

The main announcement, however, will be the gross domestic product figures, which are out at 8.30am GMT.

On Thursday, accounts of the last European Central Bank monetary policy committee will come out 11.30am GMT.

There’ll also be some significant US data releases, including continuing and initial jobless claims as well as consumer price indices for September.

Finishing the week, next Friday will be Chinese trade balance data – a release likely to be closely watched given the recent trade battles between China and the US.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.


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