Forex Analysis & Reviews: 08.05.2022 - NFP gave the dollar a hint....

08.05.2022 04:34 AM

NFP gave the dollar a hint. The trend does not lose relevance, a new growth forecast has been named

Balanced data came out on the US labor market on Friday, an impressive growth rate was maintained. As in March, 428,000 new jobs were created in April, which is higher than forecasted 390,000.

Unemployment also remained unchanged from the previous month (3.6%). Overall, current employment is 1.2 million below pre-pandemic peaks and reflects full employment.

Traders' focus on the report on employment in the non-farm sector is the average wage. This is perhaps the most important economic indicator that has maintained support for Treasury yields and the dollar.

US Average Hourly Wage Y/Y

The average hourly wage rose by 0.3% in April compared to March and by 5.5% in annual terms. Historically, this is a high growth rate, but it is still not able to outpace the 8.5% price increase.

However, wage growth has stabilized and is unlikely to push inflation sharply upwards, as it was before. It is worth noting that the current data does not provide for the need for a more stringent Federal Reserve rate hike. In other words, they are a kind of signal that the Fed will continue to adhere to the current course in monetary policy.

Friday's balance of signals from the labor market should contain fluctuations in the stock and currency markets, but the trends will remain unchanged. The stock market will weaken, albeit at a slower pace, and the dollar will strengthen.

At the end of the working week, the dollar index still conquered the 104.00 high, thus testing new peaks in almost 20 years. It wasn't difficult, as major competitors are losing customer support one by one.

The US dollar now has good chances to settle above 104.00. The last time the index tried to climb higher, the economy and inflation needed to be stimulated. Now everything is quite the opposite - cooling is needed.

Compared to last year, now the attitude towards the greenback has changed a lot, given that in 2021 the dollar was often talked about as losing its status. This sort of thing happens from time to time when things go downhill for a greenback. Now it is back on horseback and can overtake previous achievements.

The rising value of the dollar, along with more attractive US Treasury yields, make it an almost uncompromising choice at the moment.

Experts almost unanimously talk about the strength of the dollar. Economists at HSBC believe it will continue to rise.

"We continue to believe that the US dollar will remain strong. First, the Fed's attitude to the corresponding pace of tightening may change if the situation requires it. Secondly, the 50bp momentum is likely to be maintained over the next few meetings. Third, while dollar bears will say that the Fed's aggressive hike is priced in, the same is true for most Big 10 central banks. And finally, the dollar will remain the most attractive buy in the face of global slowdown risks," strategists comment.

On Friday, the US dollar index is under some selling pressure after reaching 104.00. However, the underlying bullish potential remains in place. A fresh surge above 104.00 should test 105.63 (11 December 2002 high) before targeting the December 2002 peak at 107.31.

Such movements of the US currency will force its key competitors to retreat further. Will European and Japanese officials calmly watch their names fall broadly? Probably not. This will exacerbate the existing economic problems and the situation with inflation.

Japan managed to stop the strongest fall of the yen at the end of April, which stabilized near 130.00 against the dollar. Recently, there has been a wave of intensification from politicians about a possible tightening of rates to match the pace of tightening from the Fed.

So far, these are only verbal interventions, and the greenback looks extremely confident. If next week it manages to settle above 104.00 on the index, then the bulls' appetite will rise significantly. The 107.00 level, the next technical stop may well be the value of 120.00. Here we are talking about the high since the beginning of this century.

You have already liked this post today

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Para cualquier consulta sobre contenidos, póngase en contacto con editorial-board@instaforex.com

News

Más artículos por este autor

EURUSD

Euro vs US Dollar

Seleccione el marco de tiempo

min

hora

horas

día

Iniciar comercio

Gana con los cambios en el valor de las criptomonedas con InstaForex.

Descarga MetaTrader 4 y abre tu primera operación.

Recommended Stories

Trump promete acuerdos ya esta semana: ¿en qué se traducirá esto para el dólar?

El Bitcoin presta atención a la opinión de la Fed. El ciclo actual del BTC no se parece a los anteriores

¿Sobrevivirá el índice S&P 500 bajo la "cruz de la muerte"?

El mercado en zona roja: Dow -0,4%, Nasdaq -0,1% — los buenos informes no salvaron a Wall Street

Superando las previsiones: se pronostica que el oro subirá hasta los $3700. El dólar en desventaja, el euro al alza

El Bitcoin en confusión: el precio del BTC cae, luego sube ligeramente – ¡no encuentra un punto de apoyo!

Trump sacude los mercados: el dólar, el euro y el yen en el epicentro de una nueva tormenta arancelaria

Resumen de noticias del mercado de EE. UU. 26.03

Cuando los mercados están agitados: el gas sube, el petróleo duda

El oro bate récords: $3.000 no es el límite

Principales Análisis