US Dollar Index Gaines Ahead of US Jobs Numbers

The focus among traders today will be in the United States, which will release the jobs numbers for February.
This is a monthly number usually released by the Labor Department to provide investors and policymakers with a snapshot about the health of the economy. It is usually one of the most-watched number in Wall Street and around the world.

Today, the headline non-farm payrolls number is expected to show that the economy added more than 181K jobs in February. This might be much lower number than the 300K+ that was released in the previous month. In December too, the economy added more than 300K jobs. A reading close to this may be a victory for the US and a sign that the economy is doing well. This number comes two days after ADP released its own reading, which showed that the  economy created 181K, which was below the expected 189K. The number also comes a day after data from Challenger showed that the number of layoffs had increased by more than 100%.

Closely watched after the headline NFP number will be the unemployment rate, which is expected to reduce to 3.9% from last month’s 4.0%. The unemployment number measures the number of people of working age, who are not working. This number will be watched together with the U6 unemployment rate number. U6 measures the number of unemployed people and those who are working part-time for economic reasons. This number is expected to remain at 8.1%.

The next number that traders will focus on will be the wage growth. This is an important number because an economy that is in full employment but one that wages are sluggish is not considered very good. This is exactly what is happening in Japan, where the unemployment rate is below 3% but one where wages are not growing. In the US, traders expect the wage growth to remain unchanged at the 3.3% level. On a month-over-month basis, the average hourly earnings are expected to remain at 0.3%. Closely related to this will be the average hours worked. The average number of hours worked is expected to remain at 34.5.

Traders will also focus on the manufacturing payrolls. In the US, the rate of manufacturing has been declining over the years as manufacturers shifted their manufacturing basis from the country to Mexico and China. The sector is expected to have added 11k jobs, which will be lower than the previous month’s 13K.

Ahead of the jobs numbers, the dollar is relatively strong because of the weakness in the euro. The euro forms the biggest constituent of the dollar index. This has been offset by the Japanese yen, which gained slightly today following the release of the stronger GDP numbers. The economy expanded by 1.9%, which was higher than the expected 1.8%. This was boosted by the strong household spending.

The post US Dollar Index Gaines Ahead of US Jobs Numbers appeared first on Forex.Info.

Source:: US Dollar Index Gaines Ahead of US Jobs Numbers

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