NFP Make or Break For October Fed Hike
NFP in Focus
The US Dollar is on watch today as traders brace for the latest US labour market reports due this afternoon. The data is seen as pivotal for the October FOMC where expectations of a further hike have been fluctuating wildly recently. Market pricing for an October hike began the week around the 70% mark on the back of a slew of hawkish commentary from several Fed policymakers last week. However, some data softness mid-week and dovish comments from Fed’s Jefferson and Williams has seen a wild shift in sentiment with pricing for a hike now down around the 25% level. Despite this, USD is firmly higher, reflecting a disconnect between market pricing and price action.
Forecasts For Today
Looking ahead today, the stage appears clearly set: If the data comes in on the strong side, rate hike pricing should jump again, endorsing the rally in USD and pushing the greenback higher into next week. However, if data comes in on the soft side, the rally in USD is vulnerable to a sharp correction lower, realigning with market pricing for the FOMC. On the numbers front, the headline NFP is forecast at 89k, down from 162k prior. If such a drop is confirmed, this should keep rate hike expectations muted. However, with such a low estimate against the prior, there is clearly plenty of room for an upside surprise.
Technical Views
DXY
The rally in the Dollar has seen the index testing above the 101.91 level, marking its highest level since early 2025. With momentum studies bullish, focus is on a continuation higher with 103.20 the next bull target. If we break lower again, 100.18 is the big support zone to note.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.