U.S. Non-Farm Payrolls

Dear Traders,

We got what we were looking for with our short-entry in the GBP/USD, and we took advantage of almost the entire downward move which has ended in a profit of 110 pips. The British pound dropped sharply after the Bank of England’s monetary policy announcement did not satisfy investor’s expectations. Only 1 member of the monetary policy committee voted for a rate hike – investors had been looking for more than 2 hawks and sold-off the pound as a result. Moreover, the BoE lowered its inflation forecast with Governor Mark Carney indicating that “negative inflation wouldn’t be surprising”. The bottom line is, that the central bank is in no rush to change its monetary policy in the near term.

The euro failed to provide any profitable trading chance yesterday, remaining sideways between 1.0935 and 1.0875. Let’s see if we see more momentum coming up with the U.S. labor-market numbers today.

What to expect from today’s Non-Farm Payrolls?

Economists are looking for a healthy job report with payrolls growth exceeding 200K, a steady unemployment rate and Average Hourly Earnings to grow at a steady pace. If one of these conditions will miss, dollar bulls could be disappointed and drive the USD lower. Arguments for weaker payrolls could be the smaller increase in private-sector jobs according to the ADP report on Wednesday. On the other hand, the ISM index rose by a record level, an argument for stronger payroll growth.

Payrolls are due for release at 12:30 GMT.

We wish you a wonderful weekend!

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