Featured # Markets | 3 years ago

Dollar Yields Ground Prior to U.S. Jobs Report

On Friday, the dollar fell versus a basket of currencies but remained on pace for weekly gains and investors prepared for April’s U.S. non-farm payrolls report. The dollar index declined 0.1 percent at 93.652, having increased an estimated 2 percent from a low of 91.919 hit this week, its lowest point since January 2015.The dollar was 0.2% lower at 107.05 yen, having advanced for three consecutive days to retreat from an 18 month low of 105.55 hit on Tuesday. An official survey displayed economists anticipate U.S. payrolls to have gained by 215,000 in March. An official survey showed economists expect U.S. payrolls to have risen by 202,000 in April after increasing by 215,000 in March. ECONUS A weaker-than-predicted ADP report this week has ignited market expectations of a healthy reading set for Friday.

“It will need a significant upside surprise from the jobs report for the dollar to change trend,” said Yujiro Goto, currency strategist at Nomura. “We expect gains in dollar/yen to be capped around 108 and similarly downside for the euro will be limited.”Traders will also direct their attention to any indication of increases in wages for hints on inflationary pressures in the economy.” On payrolls, we are forecasting 188,000 jobs being added, with the jobless rate at 5 percent and wages rising 0.4 percent, month on month,” said Ned Rumpeltin, European head of FX strategy at TD Securities.” If the numbers surprise marginally, then we think the impact on the dollar for today will be constrained as expectations of when the Fed will move are unlikely to be altered.”

A number of funds have been fading favorable bets on the dollar amid uncertainty over when the Federal Reserve will hike rates. Investors only see a 13 percent chance that the Fed will hike in June, according to CME’s FedWatch. It anticipates the dollar/yen at 103 yen in the end of the second-quarter, in comparison to its previous expectation of 110, while the euro is expected to hike to $1.16, up from an earlier forecast of $1.06.

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