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The US Dollar Looks for Sustenance from non-Farm Payroll Data in Friday’s Employment Situation Summary Report

US Dollar reaction non farm payroll report

USD is outperforming its G10 rivals ahead of the month’s most important economic data release out of the US.

  • US Dollar Index: 96.66
  • GBP to USD rate: 1.2657
  • EUR to USD rate: 1.1160

With the USD continuing to be bid higher trader focus now turns to the release of the US Employment Situation Summary report due out on Friday the 7th October at 13:30 BST.

Markets are looking for a reading of 175K to be delivered, anything either side will determine the Dollar’s reaction.

Also keep an eye on Average Hourly Earnings which are forecast to read at 0.2%.

The US dollar remains bid tone in the wake of yesterday's strong ISM Services data that saw the index jump by the largest one month gain ever having increased by 6.5 points to 57.2.

The employment component which is one of the best forecasters of the non-farm payroll report and has thus elevated expectations ahead of Friday’s release.

The danger of course is that markets are too optimistic on the Dollar and the slightest disappointment is met with selling pressures.

Traders will use the data to gauge whether they should price the Dollar higher for a US Federal Reserve rate rise in December.

“A rate hike from the Fed in December has been on the cards for some time. After Wednesday’s stunning non-manufacturing ISM, which saw gains across the board, the market goes into Friday’s NFP report with great expectations,” says Kathleen Brooks, Research Director at City Index.

With regards to the GBP/USD Brooks says the pair may fall down to 1.25 if we get a strong NFP number.

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