Investors await U.S. jobs data for cues on the labour market strength and the U.S. economy and what the report would mean for the Fed moving forward.
The US economy added 225,000 jobs in January, as the surprisingly strong pace of hiring continues. The unemployment rate edged slightly higher to 3.6%.
The Labor Department’s data showed U.S. job growth picked up in January. This growth indicates the economy will probably continue to grow moderately despite a deepening slump in business investment.
The report follows a clutch of positive economic data this week, including upbeat private payrolls numbers last month. Investors want to know what the report would mean for the Federal Reserve moving forward. The Fed kept benchmark interest rates unchanged at its January policy meeting, citing moderate economic growth and a strong jobs market.
Data earlier this week shown a rebound in U.S. manufacturing. Further, unemployment benefits dropped to a nine-month low and worker productivity rose.
Recent upbeat U.S. economic data and China’s stimulus steps gave traders some respite from heightened concerns about the new virus. However, the uncertainty about the impact of the epidemic on global growth looks set to keep most investors risk-averse – at least in the short run.
Strong employment numbers in the United States encouraged investors to buy the dollar. The greenback has gained in recent sessions because of fragile risk sentiment. The dollar index edged 0.1% higher to 98.557, near its strongest since mid-October.
START TRADINGForex – US payroll confirms labour market strength
The focus for Friday is non-farm payrolls data, which are expected to confirm the U.S. labour market strength and robust health.
The U.S. dollar traded at 109.9 yen on Friday, just below a two-week high reached earlier. For the week, the dollar was on course for a 1.5% gain versus the yen, which would be its biggest weekly gain since July 2018.
The euro fell to its lowest since October after German industrial output for December recorded its biggest decline in a decade.
Against the dollar, the Swiss franc traded at 0.9745, headed for its biggest weekly decline since August 2019.
The Australian dollar weakened 0.5% to $0.6699. The Reserve Bank of Australia slashed growth forecasts in its quarterly economic outlook, blaming bushfires and the coronavirus. The Aussie was still on course for its first weekly gain in six weeks.
Britain’s pound traded near a six-week low against the dollar and fell against the euro. Sterling was headed for its worst week since the aftermath of the December general election.
The pound was last down at $1.2923 GBP=D3. It staged a small recovery against the euro, rising 0.1% to 84.86 pence.
Oil prices edged down on Friday. Brent crude futures fell 20 cents, or 0.4%, to
$54.73 a barrel by 1140 GMT. Brent prices were heading for a fifth
weekly loss due to lingering fears over the impact of the virus.
WTI crude futures were down 29 cents, or 0.6%, at $50.66 a barrel, also
heading for a fifth consecutive week of losses.
Gold prices were little changed on Friday as worries remained over the economic impact from the coronavirus. The safe-haven metal was on track for its biggest weekly decline in three months.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money