Forex Market Update: Dollar Index Rises as Market Anticipates Strong Non-Farm Payrolls Report
The dollar index edged up on Monday as investors unwind some negative bets on the dollar amid expectation that the non-farm payroll report, which is due on Tuesday, might show strong numbers for September, which in turn could prompt the Federal Reserve to start early tapering of the quantitative easing.
At last check, the dollar index gained 0.19% to 79.77.
The closely-watched non-farm payrolls report, which was originally scheduled to be released on October 4th, was delayed due to the shutdown. The Labor Department is expected to release the job-numbers on Tuesday and economists anticipate 180,000 net payroll additions in September.
The greenback came under pressure last week, plunging to its eight and half month low against a basket of major currencies after lawmakers struck a stop-gap deal to avoid the debt-default. The uncertainty over the economy (due to short-term budget solution offered by lawmakers) and downbeat business sentiment following the shutdown raised the possibility that the Fed might keep on its accommodating monetary policy for a longer period of time.
However, a strong job forecast has revived talks of possible tapering before the year end.
“For now all eyes will turn to U.S. nonfarm payrolls data tomorrow with markets anticipating a print near the 180K level,” said Boris Schlossberg, managing director of FX Strategy at BK Asset Management in New York, according to Reuters.
“If the numbers are close to expectations the greenback could see a relief rebound as the week proceeds,” added Schlossberg.
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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. |