Strong NFP Headline Fails to Pack the Punch

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Dollar bulls were hesitant to take the driver’s seat on Friday, despite US Non-Farm payrolls exceeding market expectations by rising 196k in March.

With payrolls rebounding in March and unemployment holding steady at 3.8% – a near 49 year low, fears over the US economy are likely to ease. However, markets were clearly more concerned with wage growth which disappointed by slowing 0.1% mom, below expectations of 0.3%. Sluggish wage growth suggests that inflation is likely to remain muted which will inevitably fuel speculation over the Federal Reserve cutting interest rates in the distant future.

Taking a look at the technical picture, the Dollar Index dipped following the US jobs report. With the data seen as a mixed bag, the DXY is likely to swing back and forth into the weekend. If bulls do end up making a late appearance, the Dollar Index has the potential to challenge 97.50.

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Published by

Lukman Otunuga

Lukman Otunuga is a research analyst at FXTM. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in the various factors affecting the currency and commodity markets. Lukman provides in-depth analysis on the global currency and commodity markets and is often quoted by leading international media outlets such as: MarketWatch, CNBC, NASDAQ, Reuters, AFP, The Guardian and Yahoo. Prior to joining FXTM, Lukman spent two years as a research analyst with international currency broker FXCM, where he focused on a technical and fundamental analysis of the global currency, commodity, and stock markets. Lukman was also responsible for leading educational seminars for international and local high net worth individuals, and has published a series of educational articles on forex trading with City A.M. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance, where he studied corporate finance, mergers & acquisitions and the role of international financial institutions