4 March AtoZForex, Lagos – The USD got hit by a double strike of disappointing data, with the unemployment claims data showing 278k individuals filed for unemployment insurance for the first time during the past week, as against forecast of 271k. Also, the Institute for Supply Management (ISM), Purchasing Managers’ Index (PMI), which asks respondents to rate the relative level of business conditions did not particularly impress, showed a 53.4 reading, as against 53.5 in the previous month. Also, growth in U.S. service industries fell for a fourth consecutive month in February, prompting the first job cuts in two years. The ISM’s services employment measure dipped below the expansion threshold for the first time since February 2014.
All of these contributed to the sharp decline of the USD across board yesterday. As the markets await NFP report today, we expect a possible trend setting reaction from the greenback after the report. Canada trade balance due at 1:30 P.M GMT is also forecast to show a 1 billion deficit.
Australia retail sales disappoints
After previous months of impressive reports, Australia’s retail sales has failed to keep up the strength for a second consecutive month in January, therefore creating further doubt as to whether the renewed vigor in household spending seen in the second half of 2015 will be sustained in the quarters ahead. The Aussie has however continued upwards against the USD, continuing for days of bullish run on the pair.
US Non-Farm payroll (1:30 P.M GMT)
As the markets await NFP report, for the US economy to be able to absorb the effects of the slower global growth and continued financial volatility, the NFP report will have to depict continued strong job numbers, alongside higher wage growth and a labor participation rate. This may however confuse the Federal Reserve more on the next rate hike path as most data coming this year so far has pointed towards a slowing local economic conditions.
Economists forecast a 195k change in the number of employed people during the previous month, excluding the farming industry. And unemployment rate remaining at 4.9%, which marks a drop of more than 50% from the post-crisis high. A positive report could set the trend for dollar strength, having been trading mixed in recent times.
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