US dollar fell sharply in the past few days, especially after the US Federal Reserve announced a decision to cut interest in an emergency meeting for the first time since the global financial crisis by 50 basis points from 1.75% to 1.25% in an attempt to address the risks of the Corona virus The American economy as confirmed by the bank.
The dollar index recorded strong declines that exceeded 3% from its highest in February, while it recorded the worst retreat against the Japanese yen since September 2019. This comes at a time when investors are closely watching US jobs data during Friday hours, hoping that the data will support the US dollar and that it will receive some support in the coming period.
What happened in the job data last time?
The NFP increased more than expected by 225k, but the pace of wage growth slowed on a monthly basis from expected from 0.3% to 0.2% and unemployment rates increased from 3.5% to 3.6%.
Indicators for job data today:
- The employment component in non-manufacturing PMI ISM data increased from 53.1 to 55.6 points. (positive)
- Consumer sentiment increased from 130.4 to 130.7. (positive)
- Consumer Sentiment from Michigan increased from 99.8 to 101. (Positive)
- The employment component in manufacturing PMI increase from 46.6 to 46.9. (Negative still below 50 levels)
- ADP added 183k versus the previous reading at 209k (negative).
- Unemployment claims continue to rise from 1.701 million to 1.729 million.
How will the data today affect the direction of the US dollar?
If NFP added less than 150,000 jobs and wage growth continue to slow down, the US dollar may see further decline, returning to 95.00 levels again, as the possibilities of lowering interest rates will increase in more than one meeting in the coming period.
On the other hand, in the event that the data came out better than expected, this US dollar will help to sigh for some time as it will contribute to alleviating market fears of a slowdown in the growth of the American economy and the prospects of its trend towards recession, so that the dollar index then rises to 97.00 levels.
