Forex Top Team

Will the US Dollar Market React to the US Employment Statistics?

Today, all eyes are on the release of the US employment statistics for January. Another key topic this week has been the US Federal Reserve (FOMC). Initially, the market reacted with a USD buying bias following Chairman Powell’s statement during the press conference that he did not consider a high probability of a rate cut in March. However, afterward, with the decline in US bond yields, USD selling has become dominant. Early rate cut expectations remain strong in the short-term financial markets, with a rate cut in May largely priced in. While there is currently selling pressure on the USD, it remains to be seen if this will become the prevailing trend. The US employment statistics may be the key for next week’s market direction.

For this month’s US employment statistics, the market is expecting an increase in non-farm payrolls of approximately 185,000 (median estimate), slightly lower than the previous figure of 216,000. However, economists’ estimates vary widely, ranging from around 120,000 to nearly 300,000, making it necessary for the numbers to be significantly above or below expectations to trigger a market surprise reaction. The unemployment rate is expected to rise slightly to 3.8% from the previous 3.7%. Average hourly earnings are forecasted to remain stable at +4.1% year-on-year and show a slight decline in the month-on-month change from +0.4% to +0.3%. At this stage, it is expected that the US employment situation will remain robust, as indicated by these forecasts.

Additionally, on the 4th of next week, Federal Reserve Chairman Powell is scheduled to appear on “60 Minutes” and answer questions regarding inflation risks, the economy, and the timing of rate cuts. Market interest in this event is gradually increasing, and if the US employment statistics result in mixed outcomes, they may be considered as the next important focus.

In addition to the US employment statistics, economic indicators to be released in the global markets include French industrial production index (December), French fiscal balance (December), Brazilian industrial production index (December), new orders for manufactured goods (December), the University of Michigan Consumer Sentiment Index (final) for January, and durable goods orders (final) for December.

Regarding speaking events, there will be speeches by Central Bank of Portugal Governor Centeno and Bank of England Chief Economist Pill, each related to financial policy. Today’s notable corporate earnings reports include Chevron, ExxonMobil, and other major oil companies.

Pay attention to the non-farm payrolls (NFP) and the unemployment rate values. If there is a significant market reaction during this period, it’s worth following the USD movement.