ISM Non-Manufacturing Report: 4 April US Dollar Trading Outlook

The spotlight falls on the Dollar today ahead of the release of the ISM Non-Manufacturing Report from the US that is the first piece of tier one data scheduled for this week. How will this Key data pending for release today impact the US Dollar? Gain insight into this 4 April US Dollar Trading Outlook.

4 April, ADS Securities – The report will shed more light on the performance of the Services sector in the States and the employment component of today’s figures will be closely watched.

The ISM data acts as a reliable bellwether for US labor market’s health and with the Non-Farm Payrolls report, just a couple of days away today’s data will be vital in shaping expectations.

ISM Non-Manufacturing Report: 4 April US Dollar Trading Outlook

A robust reading of the ISM report today will help the Dollar extend its gains and push higher versus its peers as investors will treat this as a precursor for a positive NFP report on Friday that will solidify Fed’s bullish outlook.

The Dollar/Yen remains at the forefront: the easing of global tensions and China’s timid reaction to US tariffs have not helped the Japanese currency, and the greenback is likely to make another effort to challenge the 107 barriers.

An intense reading in the ISM report will act as a perfect catalyst for the Dollar/Yen to have another try at this key resistance today, but we would also expect any gains to be limited to this area as investors would be cautious ahead of Friday’s report.

US Dollar Outlook

This morning the US Dollar is pulling back from yesterday’s levels after a day that saw the US currency posting gains against the Euro, the Yen, and Gold but moving lower against the commodity currencies.

It’s the Canadian Dollar that is leading the gains against the greenback has gained around 1.3% since Monday; a correction on Oil’s prices, an uptick in Canadian yields and hopes for progress in the NAFTA negotiations spurred the Canadian currency higher driving the USD/CAD below the 1.28 mark.

This is a key technical level, and a sustained break below it will signal a bearish tilt in the currency pair’s outlook; if the loonie remains below 1.28, then the next level we’re looking at is the 1.26 area.


The Euro will also attract investors’ attention this morning in light of the Consumer Price Index data pending for release. The report is expected to print higher than last month to indicate that there is some progress with inflation in the Euro area but we have our doubts on whether it will have any kind of positive effect on the shared currency’s price action.

 The Euro broke below 1.23 yesterday after Dollar’s advance and given ECB’s bearish bias a positive CPI reading today will be hard to alter the negative tone for the Euro – any potential gains today should be limited to the 1.23 – 1.2350 area.

Equities In Asia

Equities in Asia are mostly trading in the green this morning following a positive day for the stock markets mainly in the US.

The European and US futures are mixed though ahead of the London opening: the DAX and the CAC are trending just above water while the FTSE 100 is pointing to the downside followed by the US markets suggesting a bearish opening bell. Uncertainty is the key word: concerns around the US-China trade tensions and mixed expectations for Friday’s Non-Farm Payroll report force traders to remain cautious.

ADS Securities Risk Disclaimer

This article was provided by analysts of ADS Securities.

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