Wednesday, 08 April 2015 04:08

Dollar strengthens before nonfarm payroll data

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Dollar index gained to 88.17 and changed a little as market is expecting increase in jobs for last month.

Today Bureau of Labor Statistics will release Non-Farm Employment data at 1430 GMT which is expected to increase by 235k compare to 248k of Sept. Unemployment rate is expected to remain unchanged at 5.9%. Later today Fed chair Yellen will address audience on Central Banking: The Way Forward?" in Paris.

Improving labor market is likely to strengthen dollar. Waning effects of financial crisis and improving business surveys may help fed to take decision on interest rate.

Earlier in this month manufacturing PMI increased by 2.4 points to 59.0 and the Employment index in this PMI improved by 0.9 percentage points. In Service PMI little fell of 1.5 points was reported but employment index improved by 1.1 percentage point to 59.6.

On Wednesday ADP nonfarm data has also posted increase of 278k jobs for last month and yesterday jobless claims fell by 10k to 288k for last week, all suggesting improvement in labor market.

Investment in dollar and equity market is likely to continue as commodity prices are continuously coming down and major currencies are weakening against dollar.

We may see dollar index crossing five year high if the U.S. economy reports better growth in coming weeks.

 

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