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Forex Today: Strong US Jobs Data Pressures Fed

By Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

Friday’s strong US jobs data puts pressure on the Federal Reserve to pursue a hawkish monetary policy, boosting the US Dollar and its 2-year treasury yield.

  • Last Friday saw US average hourly earnings rise by 0.5% month-on-month and the US economy create more than 500k net new non-farm payrolls jobs, strongly exceeding expectations and suggesting that despite the technical recession, the US economy is still exhibiting firm inflationary pressures. This has boosted the US Dollar and knocked US stocks on a stronger expectation of rate hikes, although the Dollar opened the week giving back some of its gains during the Asian session.
  • The Reserve Bank of New Zealand raised its inflation forecast, expecting headline inflation to reach 4.86% in one year, with the Official Cash Rate expected to undergo another 0.50% rate hike this quarter to a new rate of 3%.
  • The S&P 500 Index is rising again, trading off-hours above Friday’s close, continuing a weeks-long rally to approach a 2-month high price.

  • BTC/USD is continuing its recent slow but firm rise, being held by a bullish price channel. Its price is approaching a new high for August.
  • Daily new coronavirus cases globally dropped last week for the third consecutive week, reversing the earlier trend of an increasing number of confirmed cases.
  • It is estimated that 67.2% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 7.5% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.  
  • Total confirmed new coronavirus cases worldwide stand at over 589.5 million with an average case fatality rate of 1.09%.  
  • The rate of new coronavirus infections appears to now be most significantly increasing in Barbados, Chile, Japan, South Korea, Romania, and Serbia.
Adam Lemon
About Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

 

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