Today, the market will focus on the release of important data on employment in the US. After the publication of strong GDP figures and the number of jobs in August from the ADP, as well as weak data on the inflationary indicator of the Fed, all investors' attention is drawn to these statistics.
Indeed, the figures on the US economy that came out on Wednesday - the GDP and data from ADP- impressed investors and provided significant support to the US dollar. However, the value of the basic index of personal consumption expenditures (PCE), which is an important component of the inflationary index of the consumer price index, did not please investors. The indicator decreased in growth in annual terms to 1.4% from 1.5%. The monthly value of growth remained at the previous rather low level of 0.1%.
Why did the market react so quickly to these figures? This is due to the fact that the head of the Fed has repeatedly stated that the main reference point at the moment when deciding on rates is the dynamics of inflation. J. Yellen, the head of the Fed, stated that the central bank closely follows the indicator of the PCE. That's why the market reacted to these statistics, which continue to disappoint. The decline in the figure also significantly reduces the possibility of a third increase in interest rates this year.
But today all the attention of market players will be focused on the publication of data on the number of new jobs and the unemployment rate in the US. According to a survey conducted by the WSJ, the growth of new jobs in August is expected to be at 180,000. The unemployment rate is seen at the level of 4.3%. It can be assumed that if the data shows the same notable growth as the ADP figures, for example, if it is more than 200,000, then it will provide local support to the dollar. But, again, only this possible movement will be limited. First of all, the obstacle for the global growth of the dollar is the absence of inflation growth to the target of 2.0%, as evidenced by the figures of the basic index of personal consumption expenditure (PCE) published on Thursday, which may force the Fed not to raise interest rates before the end of the year.
Forecast of the day:
The EURUSD pair is consolidating above the level of 1.1880. It is believed that it may decline on the wave of strong employment data in the United States if the number of new jobs is above the forecast. On this wave, the pair could fall to 1.1800 with the prospect of further decline towards 1.1685.
The GBPUSD is trading below 1.2960. Its decline may continue to 1.2775 on the wave of positive news from the US.