Dollar dips ahead of U.S. Jobs Report

Dollar dips ahead of U.S. Jobs Report


The Dollar index which measures the greenback against a basket of major currencies retreated from a six-week high of 96.12 to settle lower at 95.76 as investors await the monthly U.S. jobs data. The dollar was supported lately by the strong economic indicators and a Hawkish Fed. The Institute of Supply Management (ISM) showed a pick-up in employment in the Manufacturing and Non-manufacturing sectors. The ISM Manufacturing Employment rose to 58.8 versus 58.5 prior, and the ISM Non-Manufacturing Employment climbed to 62.4, the highest reading in more than twenty years. On the other hand, ADP reported that the United States economy created 230 thousand jobs in September versus an expectation of 187. The released data boosted the chances of a stronger-than-expected job report today. Despite its weakness against major currencies, the dollar strengthened against the Emerging markets currencies. The USDTRY tested a ten-day high of 6.22, and the USDZAR finished higher for the fourth consecutive day at 14.85. The U.S. Treasury yields continued higher to reach new multi-year highs where the 10-year yield rose to a seven-year high of 3.23%.


The SPX500 and Nasdaq Composite had their worst sessions since late June, weighed down by the rise in the U.S. Treasury yields. The Tech-heavy Nasdaq Composite was the worst performer with a drop of 1.8% to 7879, the S&P500 fell 0.8% to 2901, and the Dow Jones Industrial Average lost 0.8% to 26627. The Chicago Board of Exchange Volatility index, VIX, traded at a seven-week high of 15.84.


Gold prices were almost steady near the $1200 psychological level as market participants await the release of the U.S. jobs data which usually lead to higher volatility. On the other hand, the silver ounce fell for the second consecutive day to settle at $14.57.


Oil prices retreated from a four-year high as Saudi Arabia and Russia said that they would raise output to offset the supply disruption from Iran. The West Texas Intermediate crude futures fell by 2% to $74.61 per barrel, and the Brent futures lost 1.3% to $84.87 per barrel. The U.S. energy services firm Baker Hughes will report the weekly U.S. oil rig count later today.

Major Economic Events

GMT Country Event Expectation Previous
12:30 US Nonfarm Payrolls (Sep) 185 201
12:30 US Private Nonfarm Payrolls (Sep) 180 204
12:30 US Employment Change (Sep) 3.8% 3.9%
12:30 US Average Hourly Earnings (MoM) (Sep) 0.3% 0.4%
12:30 CA Employment Change (Sep) 27.5 -51.6
12:30 CA Unemployment Rate (Sep) 5.9% 6.0%


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