The financial markets begin Friday with expectation. While the US dollar (USD) maintains its strength against its main rivals, all eyes are on the publication of employment figures in the United States, a crucial indicator for investors.
Also read: According to this expert, this key figure could shake up forex and reverse current trends!
A decisive day for the dollar
After a week of growth, the dollar continues to hold near the peaks reached in early January. THE Nonfarm Payrolls (NFP)employment figures outside the agricultural sector, will be released by the Bureau of Labor Statistics this Friday afternoon. This data will also include unemployment rates and wage developments, elements closely monitored to anticipate the monetary policy directions of the Federal Reserve (Fed). Analysts expect an increase of 160,000 new jobs in December, compared to 227,000 in November, with an unemployment rate unchanged at 4.2%.
The dollar dominates major currencies
This week, the dollar performed mixed against major currencies. It was particularly strengthened in the face of pound sterling (GBP)recording an increase of 1.1%, while it fell slightly against the Canadian dollar (CAD). The table below summarizes weekly currency movements.
| Devise | Variation face au USD (%) |
|---|---|
| EUR | +0,20 |
| GBP | +1,10 |
| JPY | +0,71 |
| CAD | -0,27 |
Pressure on the pound increased after a prolonged fall in UK bond yields, as theeuros (EUR) struggling to recover in the face of the strength of the dollar.
The expected impacts on gold and forex
Gold continues to rise, reaching a monthly high of more than $2,670 per ounce this Friday morning. Investors closely follow the evolution of interest rate Americans, which directly influence demand for safe haven assets like gold. A rise in NFPs could, however, slow down this momentum, by strengthening the dollar and making gold less attractive.
In forex, the USD/CAD and EUR/USD pairs oscillate within narrow ranges. While USD/CAD remains stable above 1.4400, EUR/USD is under pressure below 1.0300. Volatility could intensify this afternoon with the publication of American and Canadian employment figures.
Why do NFPs influence markets so much?
THE Nonfarm Payrolls are not limited to measuring the level of employment in the United States. They offer insight into general economic health and inflationary pressures. A significant increase in jobs often prompts the Fed to adopt more restrictive monetary policy, thereby strengthening the dollar. On the other hand, an unexpected drop could revive fears of an economic slowdown, weighing on the greenback.
Frequently asked questions about NFPs
- What is NFP?
Nonfarm Payrolls measure employment growth in the United States, excluding agricultural sectors. - Impact on the dollar?
A rise in NFPs tends to support the dollar by reinforcing expectations of rising interest rates. - Link with gold?
NFPs influence the price of gold via rates and dollar strength. An increase in jobs often weighs on the precious metal.
December employment figures promise an eventful day in the financial markets. It remains to be seen whether the dollar will maintain its rise or whether it will give way in the face of unexpected data.
