Today on Friday, the markets will closely monitor the published data on unemployment in the US. These figures are really very important, as they will have to show investors whether the current positive trend on the US labor market remains strong.
According to the forecast provided by Bloomberg, the number of new jobs in January should increase by 175,000. Also, the probable range of values is set at 150,000 to 205,000. It is important to note that in December, the US economy received 148,000 new jobs. According to the forecast, the unemployment rate should remain at 4.1% while a probable range of values from 4.0% to 4.2% is also established.
In light of the "weakness" of the dollar in recent years, the question arises about how it can react to the positive values of the indicator. And it is clear that if the data are weaker, the dollar will be under pressure. Investors are interested in the likely development of events in the case of positive data. In our opinion, if the data proves to be strong, they can only provide limited support in the present situation of the general negative attitude of the market towards the dollar. Most likely, the dollar will remain in a state of "weakness" before the March meeting of the US regulator, when the Fed is expected to raise interest rates for the first time this year.
As we have repeatedly pointed out, the main reason for the "weakness" of the dollar is not in the dollar itself but in the belief of the markets that the world's central banks such as the ECB, the Central Bank of Japan, and the Bank of England this year will begin to eliminate incentive measures . This supports the interest of market players of the major currencies.
But there is another objective problem on the market: this is the continuation of the growth of yields on US Treasury bonds. This is an important supporting factor for the dollar, which will be certainly won back sooner or later. When the market understands that the Fed will continue to vigorously raise rates and the yields of government bonds inexorably grow, it will certainly help to increase investors' interest in the dollar and there is no hope for a change in monetary rates in the world's Central Banks to help their currencies grow.
Forecast of the day:
The EURUSD pair reached a local maximum in the range of 1.2360-1.2500. But it could be under pressure and fall to 1.2360 if employment data in the US turns out to be strong.
The USDJPY pair is trading above the 109.15 level. It can also get support against the background of strong data from the US and grow to 110.35.