Friday, 5 Nov 2010

USD May See Gains Following Non-Farm Figure

Ahead of today's US Non-Farm Payrolls report, the market has remained relatively calm. Both the EUR/USD and USD/JPY pairs have seen slight drops, while gold has stayed flat throughout the morning trading session. Analysts are predicting a healthy increase from last month for the Non-Farm figure. If the indicator comes in at its predicted level of 63K, it would represent the first positive US Non-Farm figure since June. This may help the USD rebound some of the dramatic losses it took on Wednesday following the announcement of the Fed's new quantitative easing plan.

Currently the EUR/USD pair is trading around the 1.4130 level, down from around 1.4230 last night. Traders will want to pay careful attention to this pair, as it is likely to see heavy volatility before and after the Non-Farm figure is announced. Despite the optimistic predictions for the employment figure, analysts are fairly confident that the national Unemployment Rate will remain at its current level of 9.6%. If so, it would mean that the US is still in a dire economic situation, and any gains the dollar may make today will likely be temporary.

Traders will also want to pay attention to the speech from the Fed Chairman scheduled to take place at 18:00 GMT. Given the market volatility experienced after Wednesday's FOMC statement, traders can bet that today's speech will also shake up USD pairs before the market closes for the weekend.