Forex Market Update: Dollar Gains Ahead of Jobs Data
The U.S. dollar edged higher in Asian trading on Thursday, hitting a six-and-a-half month high against major rivals. The greenback is gaining after the better than expected ADP jobs report released on Wednesday. Traders are now eyeing the all-important nonfarm payrolls data, which is scheduled to be released on Thursday.
A report from ADP on Wednesday showed that private sector in the U.S. added 198,000 jobs in February, well above the consensus forecast. The latest data has once again highlighted the fact that the U.S. economy is seeing a strong recovery. Traders are now expecting solid non-farm payrolls data for the month of February, which will be released by the Labor Department on Friday.
A solid non-farm payrolls report will raise the possibility of an early end to Federal Reserve’s bond buying program, which would be a positive for the dollar.
Speaking to Reuters, Teppei Ino, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, said that one reason the dollar is broadly strong could be that while the world’s many other central banks are eyeing more easing, at least at the Fed the debate is about existing from stimulus, not doing more of it.
In Asian trading, the dollar index rose to 82.604, the highest level since August 20.
Traders are also waiting for European Central Bank’s (ECB) monetary policy meeting, which is scheduled to take place on Thursday. While the ECB is expected to keep euro zone’s benchmark interest rates unchanged at Thursday’s meeting, a rate cut is expected in coming months given the weakness in the euro zone economy. Traders are also focusing on comments from ECB President Mario Draghi.
Earlier, the Bank of Japan (BOJ) kept interest rates unchanged at its latest monetary policy meeting. The meeting was the last chaired by outgoing governor Masaaki Shirakawa.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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