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02 Oct 2015

Traders Waiting for Non-Farm Jobs Report Before Making Dollar Moves

On currency markets, the main FX pairs spent most of the day confined to narrow ranges, which may be reflective of some wait and-see behaviour ahead of today’s key US employment report. Although, a greater than expected fall in the US manufacturing ISM (to 50.2, lowest since May 2013) did act as a headwind to the dollar.

Meantime, the policy speech from the ECB President, Mario Draghi, provided little in the way of new information, thus euro reaction was minimal. The lack of moves yesterday was summed up by the EUR/GBP pair which spent the day in a tight 73.5-74p range. Meanwhile, the EUR/USD pair traded in the upper half of the $1.11-1.12 range. Cable (GBP/USD) remained around the mid $1.51 mark.

US Employment & Interest Rate

The focus is firmly on the US, where we get the aforementioned employment report. Non-farm payrolls are forecast to show another strong 200k+ increase in September, while there is some expectation that August’s somewhat disappointing 173K print will be revised up.

Either way, unemployment is anticipated to remain at a 7½-year low of 5.1%. In its last meeting statement, the Fed continued to emphasise that it needs to see “some further improvement” in the labour market before hiking rates. Strong data today will support the case for a rate hike before year end. This could in turn provide some support to the dollar as we head into the weekend.

US Wage growth expected to reach 2.4% according to Economist. August and July both records wages growth of 0.6% and 0.5% respectively. Read more about wages and jobs growth in America

Portuguese economy is recover

The Portuguese economy has exited from recession since 2013 however in 2015 the economy is witnessing the unemployment beginning to recede slowly and growth through exports. In 2011, Portugal received funds from Europe and the IMF which required the government to make cuts of 11 billion euro.

The European commission expects Debt to GDP levels to reach 120% by the end of this year. Read more

UK Construction PMI

UK construction PMI has rocketed up to 59.9 for September from 57.9 in August. However this figure could be clouding the fact that new orders for construction projects is at a similar level to June 2013. Read more

 

 

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