Dollar is currently trading as the strongest one for the week and stays firm, as focus turns to non-farm payrolls report from the US. Markets are expecting 85k job growth in January, while unemployment rate would stay at 6.7%.
Looking at some employment related data, ADP private job growth surprised well to the upside with 174k. ISM manufacturing employment rose modestly from 51.7 to 52.6. ISM services employment, however, staged an impressive turn around, rose form 48.7 to 55.2. Four-week moving average of initial jobless claims, on the other hand rose 11k to 848k. All in all, there is prospect of some upside surprise in today’s NFP report.
Dollar index’s rally this week confirmed short term bottoming at 89.20. Immediate focus is now on 91.74 support turned resistance. Decisive break there will indicate that rise from 89.20 is at least a correction to the down trend form 102.99. In this case, we’d likely see some more upside acceleration in DXY towards 38.2% retracement of 102.99 to 89.20 at 94.46 next.
