The dollar continues to record gains against peers as tensions run high ahead of today’s nonfarm payroll figure from the United States. There is a possibility that the number will be canceled due to poor weather conditions which would like see further gains in lieu of a number that could push back further a projected interest rate hike. With the exception of the Australian dollar, the United States dollar continues to push higher against major peers despite a raft of bad data over the last week including poor factory orders which missed for the 6th-straight month and increased momentum in layoffs. Although equities suffered some of their worst days in the last few months, they remain near record highs after the Nasdaq Composite broke above 5000 for the first time since the dot-com bubble.
The persistent weakness in EURUSD is helping the dollar hold onto gains as it trades just shy of 12-year highs, however, a miss to today’s expectations could send the dollar tumbling against a basket of currencies. Based on earlier initial claims data and ADP nonfarm employment printing below trend, there is a strong possibility that today’s nonfarm payroll figure will not meet expectations. The unemployment rate will likely trend lower as forecast to 5.60% as more individuals drop out of employment and the labor force participation rate drops to new multi-decade lows. Although the United States remains the least dirty shirt in the economic laundry, economic indicators are broadly missing expectations to the downside and hearkening back to the previous financial crisis.
Dollar Strengthens Further Ahead of NFP
Market Trends - 06/03/2015