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The US Bureau of Labor Statistics (BLS) will release deferred non-farm payrolls data for January on Wednesday at 1:30 GMT.
Volatility around the US Dollar (USD) is likely to increase with the jobs report, as investors look for new insights into the path of the US Federal Reserve (Fed) on interest rates.
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What can you expect from the next nonfarm payrolls report?
The Department of Labor Statistics said last week that it had postponed the release of its official jobs report, originally scheduled for Friday, because of the partial government shutdown. After the US House of Representatives approved the package on Tuesday To end the blockThe agency announced that it will release labor market data on Wednesday, February 11.
Investors expect the unprofitable price to rise by 70,000 after the increase of 50,000 in December. The unemployment rate in this period is expected to remain unchanged at 4.4%, while annual wage inflation, as measured by the change in average hourly wages, is expected to decrease to 3.6% from 3.8%.
In reviewing the jobs report, TD Securities analysts note that they expect labor gains to remain subdued in January, with an increase of 45K.
“We are looking for the private sector to add 40,000 and the government to add 5,000. We expect the strength of the private sector to be concentrated in health care and construction. We are looking for continued signs of stabilization in the unemployment rate, which remains at 4.4%. The fire labor market is under pressure. Average hourly earnings are likely to grow 0.7% annually and 0.7% annually “. they added.
How will September non-farm payrolls in the US affect the EUR/USD?
The US dollar started the month on a firm footing as markets responded To appoint Kevin Warsh, who served as Federal Reserve Governor from 2006 to 2011, As the new head of the reserve. At the same time, the US dollar also benefited from the increased volatility surrounding precious metals, particularly silver Gold and the stock markets.
In turn, he stood up The US Dollar Index, which measures the value of the dollar Against a basket of six major currencies, by 0.5% in the first week of February. Federal Reserve Governor Lisa Cook said earlier this month that she believes the labor market will continue to support last year’s interest rate cuts.
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Cook also noted that the labor market has stabilized and is almost in balance, adding that politicians remain very attentive to the possibility of rapid transformation.
Likewise, Governor Philip Jefferson argued that the labor market would likely be balanced with a low employment environment and employment rates. appears CME Group’s FedWatch tool indicates that markets are currently pricing in a roughly 15% chance of a 25 basis point (bps) cut in March.
If the NFP reading is disappointing, with the print price falling below 30K, The unemployment rate has increased Unexpectedly, the US dollar may come under pressure due to the immediate reaction, opening the door to a higher EUR/USD. On the other hand, a non-profit number at or above market expectations can confirm another policy to maintain next month.
Market positioning suggests that the US dollar has room to grow in this scenario. Investors are also paying close attention to the wage inflation component of the report.
If average hourly wages increase less than expected, the US dollar may find it difficult to gather strength, even if the release of unprofitable earnings is close to market expectations.
Danske Bank analysts argue that weak wage growth could negatively impact consumer activity and pave the way for subsequent action by the Federal Reserve.
“The Challenger report showed more cuts than expected in January, and JOLT jobs reached 6.5 million in December (consensus 7.2 million). Therefore, the ratio of job vacancies to the unemployed in the United States fell to only 0.87 in December. This divergence is usually a good indicator of weak wage growth and may be a concern for private consumption, which supports the arguments of private consumption, which supports the private consumption arguments from the Fed,” they explain.
Eren Sengezer, Lead Analyst for European Sessions at FXStreet, provides a brief technical outlook for the EUR/USD pair:
“The Relative Strength Index (RSI) on the daily chart remains above 50, and the EUR/USD is floating above the 20-day Simple Moving Average (SMA) after testing this dynamic support last week, reflecting the willingness of buyers to maintain control.” On the upside, 1.2000 (round level, psychological level) corresponds as the next resistance before 1.2080 (January 27 high) and 1.2160 (low level). Looking south, the first major support level can be spotted at 1.1680, where the 100-day moving average lies 100-11.162 ahead. (200-day moving average, correction Fibonacci retracement of 23.6% of the January 2025-January 2026 uptrend).
