Non-Farm Payroll; US Dollar Gaining Stronger Ahead of the Employment Data Release
Despite the strong inflation numbers hovering high and significantly rising interest rates, the US economy remains resilient and the job market is holding high in a massive recovery above the pre-pandemic level.
Last month NFP release reported an addition of 223,000 jobs to the labor market, beating market expectations of 200,000. The positively anticipated report set the stage for a strong dollar gain, and a move to the upside by +1465 pips within 24 hours, followed by a decline to the downside.
Dollar index chart outlook.
Lately, a report from the Bureau of Economic Analysis relayed that the US Advanced GDP for the fourth quarter of 2022 increased at an annual rate of 2.9%. The massive recovery was bullish for the dollar and currently gaining higher.
Fundamentally, the core drivers of GDP are employment and labor market productivity.
This implies that the anticipated NFP released is expected to be strong as the Gross Domestic Product(GDP) has a strong correlation with employment. This could be bullish for the US dollar and will likely drive dollar valuation higher above the 102.500 index level.
Nevertheless, Traders should brace themselves up for a period of high volatility as an increase in Non-farm Payroll will strengthen the USD while a decrease will weaken the USD.
In response to the news release, trade the forex market with the following trading instruments on the ACT Brokers platform, as the pairs are mostly affected by the data release; EURUSD, GBPUSD, XAUUSD, USDJPY, USDCAD, USDCHF, AUDUSD, NZDUSD, US30, US100, USOIL, US Oil, Facebook, Amazon, Tesla, etc.
Time Schedule for the next NFP release:
Date: Friday 3rd February 2023
Time: 2:30 pm (GM + 1)
Author: Amogo Solomon
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