EUR/USD dropped as ECB minutes were less hawkish than expected and NFP is awaited to be stronger than forecasts. S&P 500 created a new all-time high. Meanwhile, GBP/USD tumbled 1% and met our target, and USD/CAD is rising ahead of U.S. and Canadian employment reports.
Focus of the Day: U.S. NFP and How It Will Impact Fed Rate Hike Plans
The U.S. dollar picked up against all the major currencies on Thursday and early Friday ahead of September’s non-farm payrolls. After the hurricane period, the ISM non-manufacturing and the ADP employment change surprised by beating market expectations and raise sentiment that NFP will be a strong number as well. The private businesses hired 135K workers against forecasts of 125K, while the ISM non-manufacturing PMI jumped to its highest levels in 12 years. It rose to 59.8 in September from 55.3 in August, above market forecasts of 55.5, mainly boosted by production and new orders. Moreover, the weekly jobless claims fell short of forecasts. All these reports raised the sentiment of the market participants that the NFP figure may be higher than expected. The U.S. economy is predicted to have created 90K non-farm jobs in September, the lowest in six months, from 156K in August. From our side, a number around 100K is considered sufficient as U.S. economy is close to full employment. The unemployment rate is expected to remain stable at 4.4%, as well as the average hourly earnings at 2.5%. Later on, few members of the FOMC will speak.
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