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US Dollar Looks Ahead to September Jobs Report After Strong Week of Data

October 4, 2018 at 16:58 by Andrew Moran

Benjamon Franklin looks from a 100 dollar notesThe US dollar is continuing to post incredible gains against several currencies on Thursday after an impressive week of domestic economic data and global developments. The greenback will now look ahead to the September jobs report on Friday, which is expected to come in strong.

According to the Institute for Supply Management (ISM), business activity in the non-manufacturing sector is firing on all cylinders as it expanded at a faster pace in September compared to the previous month. The Purchasing Managers’ Index (PMI) swelled to 61.6 from 58.5, beating the market forecast of 58 and reaching its best level since April 2006

Other key aspects of the report saw the Non-Manufacturing Business Activity Index jumped to 65.2%, the New Orders Index advanced to 61.6%, the Employment Index ballooned to 62.4%, and the Prices Index rose to 64.2%

Last month, private-sector employment skyrocketed, reports Automatic Data Processing (ADP) as employers added 230,000 jobs, the highest hiring rate since February, beating the market forecasts of 179,000.

The news helped the equities market post new highs, leading President Donald Trump to tweet: “Blowout numbers on New Jobs, and, separately, Services. Market up!”

Speaking in an interview with PBS host Judy Woodruff on Wednesday, Federal Reserve Chair Jerome Powell suggested that the central bank is ready to raise interest rates even higher and that it might go past neutral.

The really extremely accommodative low interest rates that we needed when the economy was quite weak, we don’t need those anymore. They’re not appropriate anymore.

Interest rates are still accommodative, but we’re gradually moving to a place where they will be neutral. We may go past neutral, but we’re a long way from neutral at this point, probably.

The remarks have helped Treasury notes as the 10-year Treasury note yield surged 0.16% to a seven-year high of 3.19%.

While the US Dollar Index has taken a hit of 0.2% to 95.80, the buck has gained against its counterparts.

The USD/CAD currency pair rose 0.42% to 1.2925, from an opening of 1.2868. The EUR/CAD climbed 0.24% to 1.1508, from an opening of 1.1479.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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