Markets Await U.S. Non-Farm Payrolls

USD
On Thursday, the U.S. dollar fell to its lowest level in 10 weeks, as the Federal Open Market Committee (FOMC) decided on Wednesday not to increase interest rates. Financial markets had expected a 20% chance of a hike in U.S. rates next March but that declined to as little as 15%. However, overall the Federal Reserve sends a largely upbeat message on the U.S. economy.

The U.S. dollar index settled yesterday at 99.70 in anticipation of the U.S. Non-Farm Payrolls as it could add 175k more jobs. The Greenback is awaiting Friday’s Non-Farm Payrolls report as a higher than expected reading should be taken as bullish for the USD and could push the Index to hit 100 pips.

Gold
Gold extended its gains and settled at $1,225 before returning to $1,215, thanks to a weak USD. Gold is awaiting Friday’s Non-Farm Payrolls report; we have to watch this release closely as a lower than expected reading should be taken as bullish for the precious metal, while a higher than expected reading could push the metal to re-test the psychological level  $1,200.

JPY
USD recovered vs. JPY and touched ¥113 as the U.S. unemployment benefit rate fell last week to 246k, which confirms the Federal’s vision on the continuation of full employment.

Euro
Euro settled at $1.075 yesterday against its counterpart as the Eurozone producer price index rose in December. Technically, the pair could trade in a limited range in anticipation of the U.S. Nonfarm Payrolls, which will be released later on today. 

Oil
Oil prices rose slightly yesterday due to Geopolitical tensions, as Trump said Washington is putting Tehran "on notice" in response to an Iranian missile test. U.S. crude settled above $53.60 and could settle at $53.50 by today.

The most important economic events:

• USD Change in Non-farm Payrolls (JAN): (GMT 15:30) – Important – Forecast (175k) – Previous (156k).
• USD Unemployment Rate (JAN): (GMT 15:30) – Important – Forecast (4.7%) – Previous (4.7%).
• USD ISM Non-Manufacutring Composite (JAN): (GMT 15:30) – Important – Forecast (57) – Previous (57.2).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.