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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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    The dollar is facing a difficult test.. What is the expected scenario?

    Rocky
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    The dollar is facing a difficult test.. What is the expected scenario? Empty The dollar is facing a difficult test.. What is the expected scenario?

    Post by Rocky Fri 03 Feb 2023, 4:42 am

    The dollar is facing a difficult test.. What is the expected scenario?



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    2023-02-03 02:28
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    Shafaq News/ The currency markets are awaiting with great interest the release of the US labor market data during last January, today, Friday, which will have a very strong impact on the US dollar trading against other currencies, in addition to its expected strong impact on the stock markets, metals and digital currencies.

    A report by the Arab Economic Trader Network reviewed a look at the upcoming data and how it affects dollar trading:

    First: A look at the US labor market during last December:

    The US labor market data came positive during last December, as the economy added about 223,000 jobs, while it was expected to add about 200,000 jobs only, after the economy had added about 256,000 jobs last November.
    At the same time, unemployment stabilized near 3.5% in the same period, better than market expectations, which indicated an increase in unemployment to 3.7%. It is also better than the previous reading, which recorded about 3.6% last November. While wages recorded a growth of 0.3% during the same period, less than market expectations at the time that wages would grow by 0.4%. This data had a strong and clear impact on the dollar against other currencies.

    Second: Evidence for the upcoming US labor market data:

    During the previous period, many economic data were released that may give an indication about the performance of the US labor market data during last January, as the data was clearly good; Thus, this may have an impact on the upcoming US labor market data, and the following are the most important of these indicators:
    The US Unemployment Claims Index: It showed great positivity during last December, as the data issued by the US Labor Statistics Bureau over the past four weeks revealed the stability of most US unemployment claims near the level of 200,000 requests, which explains the decrease in aid requests during January compared to December. The past, which may give a positive impression on the upcoming US labor market data.
    On the other hand, data from the US Bureau of Labor Statistics showed positive employment data in the US private sector during the month of January, as the data showed that jobs in the US economy in the non-agricultural sector increased by about 106 thousand jobs during that period, less than market expectations by adding 176 thousand jobs. . It is also lower than the previous reading, which recorded only about 253 thousand jobs during December.

    Third: Market expectations regarding the US labor market data:

    Market expectations indicate that accelerating the pace of interest rate hikes may have a negative impact on the US labor market data. According to expectations, the US economy is likely to add only about 193 thousand jobs. Expectations also indicate wage growth by 0.3% during the same period, in addition to the stability of unemployment at the level of 3.6% at the end of last January.

    Fourth: Possible US labor market scenarios and their potential impact on the dollar:

    The US dollar index is clearly stable near the level of 102 points, benefiting from the issuance of some positive economic data, on top of which are the data on unemployment benefits, and optimism about reaching the US debt ceiling crisis, and therefore the US dollar is waiting for the release of US labor market data to provide it with more support during the days coming.
    The first scenario is that the US labor market data is positive and better than expected, as the economy adds many jobs, and unemployment decreases below the level of 3.5%. This positive scenario for the labor market data may raise the dollar index towards the level of 103 points, and it may head towards the level of 104 or 105 A point, because this scenario will give the US Federal Reserve more flexibility with regard to continuing to raise interest rates during the next March meeting.
    While the second scenario is represented in the negative data of the US labor market and that the economy adds jobs less than expected and that unemployment rises, and in this way, the dollar may decline near the 101-point level again and may fall towards the 100-point level or less, because this scenario will make the Fed fear of The repercussions of raising interest rates, and perhaps it may stop raising interest rates, during its next meeting, especially with the recent weakness in the US inflation rate.
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