U.S. Dollar Higher As U.S. Jobs Data, Fed Meeting Loom
March 08 2017 - 10:29PM
RTTF2
The U.S. dollar strengthened against its major rivals in the
Asian session on Thursday, ahead of U.S. nonfarm payrolls data on
Friday, with speculation rife that the Federal Reserve will hike
its rates at the March 14-15 meeting.
Data from the Labor Department is forecast to show a job growth
of 200,000 in February with a jobless rate of 4.7 percent.
Nonetheless, the estimate is moderately slower than the 227,000
gain seen in January.
A precursor to Friday's data, the ADP survey, showed Wednesday
that US private payrolls rose by 298,000 jobs in February, far
exceeding economists' expectations for an addition of 190,000
jobs.
Market expectations for a rate hike next week soared to 90.8
percent after the ADP report, according to the CME Group's FedWatch
tool.
The greenback was also underpinned by rising treasury yields on
bets of a Fed rate hike next week. The benchmark yield on 10-year
note rose 2.57 percent, while that of the 2-year equivalent was up
by 1.37 percent. Yields move inversely to bond prices.
The greenback has been trading higher on Thursday, as robust ADP
data solidified hopes for a Fed rate hike next week. It rose 0.4
percent against the yen, 0.1 percent against the Swiss franc, 0.2
percent against the euro and 0.3 percent against the pound.
The greenback firmed to a 2-day high of 1.0161 against the franc
and a 6-day high of 1.0528 against the euro, compared to
Wednesday's closing values of 1.0147 and 1.0541, respectively. On
the upside, the greenback is likely to find resistance around 1.025
against the franc and 1.04 against the euro.
The greenback that closed yesterday's trading at 1.2168 against
the pound edged up to 1.2152. The greenback is poised to locate
resistance around the 1.20 region.
Data from the Royal Institution of Chartered Surveyors showed
that the U.K. house price balance stood unchanged in February, with
a score of +24.
That was unchanged from the January reading following a downward
revision from +25, and it beat forecasts for +23.
The greenback strengthened to 0.7504 against the aussie, its
strongest since January 19, while approaching more than a 2-month
high of 0.6890 against the kiwi. If the greenback rises further, it
may find resistance around 0.74 against the aussie and 0.67 against
the kiwi.
The greenback spiked up to 1.3505 against the loonie, a level
not seen so far this year. Further gains may take the greenback to
a resistance around the 1.36 mark.
The greenback edged up to 114.59 against the Japanese yen in
Asian trading and held steady in the course of the session.
Continuation of the greenback's uptrend may see it challenging
resistance around the 118.5 zone.
Data from the Bank of Japan showed that Japan's M2 money stock
rose 4.2 percent on year in February, coming in at 958.3 trillion
yen.
That was in line with expectations following the downwardly
revised 4.0 percent increase in January.
Looking ahead, the European Central bank is set to announce its
interest rate decision at 7:45 am ET. Economists expect the central
bank to maintain its deposit and refinancing rates at -0.4 percent
and 0 percent, respectively.
Following the announcement, European Central Bank President
Mario Draghi will hold the customary post-meeting press
conference.
In the New York session, Canada house price index for January,
U.S. import price index for February and U.S. weekly jobless claims
for the week ended March 4 are slated for release.
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