Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

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You should consider whether you can afford to take the high risk of losing your money.

The vast majority of retail client accounts lose money when trading CFDs.
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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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US Dollar Rally Pauses: What Will NFP Jobs Data Bring?

The soaring US dollar has been a critical market dynamic in recent weeks and months. A greenback rally has been supported by the Federal Reserve with an aggressive hike in interest rates. 

Commodities such as gold have also been kept restricted by the dynamic. 

EURUSD – Weekly Chart

eurusd weekly chart october

EURUSD has attempted a two-week rally as the US dollar pauses, and all eyes will turn to Non-Farm Payrolls jobs data on Friday. 

The ADP employment report was released on a Tuesday ahead of the NFPs and was positive for the USD despite fears of a slowing jobs market. 

The US services industry was seen slowing down modestly in September while employment surged, and prices paid by businesses for inputs fell to a 1-1/2-year low. Those figures suggested some underlying strength in the economy. 

The ADP private payroll number saw an increase of 208,000 for the month. There was also a better-than-expected narrowing of the trade deficit. The economic data led to a 1% drop in the USD price and erased some recent EUR gains.

The market is currently obsessed with the potential for a FED pivot. It is pricing in the possibility that If Friday’s jobs report is wrong, the Fed will “pivot” and slow its interest rate hikes. That theory was boosted because the Reserve Bank of Australia raised rates by only 25bps when the markets expected a 50bps hike. 

The EURUSD will now hinge on that Friday jobs number; if it is lower than expected, then the euro can gain. The ADP employment number suggests that the economy should have underlying strength. It will keep the dollar supported into Friday. 

Markets had been considering the potential for another 75bps hike in its upcoming meeting. Still, the odds of that happening had since faded from 70% to only a 50% chance. 

Even if the Federal Reserve adds another rate hike, we are likely getting closer to a slower pace of hikes by the year-end.

Last Updated: 06/10/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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