When is US Non-farm Payrolls and how could affect DXY?

The US Department of Labor will publish February’s Non-farm Payrolls at 1330h GMT. Market consensus expects the US economy to have added 190K jobs during last month and the unemployment rate to slip back to 4.7%. In addition, key Average Hourly Earning are seen expanding at a monthly 0.3% vs. January’s 0.1% gain.

NFP vs. hike expectations

A positive reading today should boost the already high expectations of a rate hike by the Federal Reserve at next week’s meeting and should collaborate further in ‘confirming’ the imminence further tightening by the Fed. Market participants stay optimistic on positive surprise today following the rock-solid ADP report (Wednesday), which showed the US private sector added nearly 300K jobs in February, crushing previous estimates.

Impact on the buck

DXY has once again been rejected from highs around 102.30 seen earlier in the week, sparking the ongoing correction lower to sub-102.00 levels amidst a mix of some exhaustion in the up trend and cautiousness on a potential disappointment from NFP. That said, the 102.30 area emerges as the interim hurdle, while there is not much in terms of relevant resistance levels until the boundaries of the 103.00 handle in case that area is cleared. On the other hand, a bigger effect is seen in case Payrolls come in short of forecasts, as the recent build up in expectations of a Fed move should quickly start to unfold, accelerating the selling pressure in DXY initially to test Monday’s low at 101.20 and opening the door for a potential break below 101.00 the figure.