The US Dollar, having weathered last week’s dip, has regained its composure. It’s now gained ground, propelled by renewed momentum. This shift comes as Middle Eastern tensions escalate, and worries persist regarding the Strait of Hormuz and its potential impact on worldwide energy markets. Despite the Easter holiday’s impact on the workweek, the US economic calendar is poised to remain a focal point, sharing the stage with global political developments.
The US Dollar Index (DXY) resumed its uptrend, setting aside last week’s decline and managing to reclaim the psychological 100.00 hurdle toward the end of the week. The FHFA’s House Price Index is due on March 31, seconded by the Chicago PMI, JOLTs Job Openings, the Conference Board’s Consumer Confidence gauge and the API’s weekly report on US crude oil inventories. The weekly MBA Mortgage Applications come on April 1, ahead of the ADP Employment Change, Retail Sales, the ISM Manufacturing PMI, Business Inventories, the final S&P Global Manufacturing PMI and the weekly report on US crude oil stockpiles by the EIA. The Challenger Job Cuts is expected on April 2, followed by Balance of Trade results and the weekly Initial Jobless Claims. The Nonfarm Payrolls will take centre stage on April 3, seconded by the Unemployment Change, the ISM Services PMI and the final S&P Global Services PMI.
Quite a volatile week left EUR/USD with modest losses and refocusing its trade on the 1.1500 neighbourhood. The advanced Inflation Rate in Germany is due on March 30, followed by the fiinal Consumer Confidence in the broader Euroland. On March 31, Germany will release its Retail Sales dara and the labour market report, while the preliminary Inflation Rate in the bloc will also be released. The final S&P Global Manufacturing PMI in Germany and the euro area will close the domestic calendar on April 1.
A poor weekly performance left GBP/USD navigating the lower end of its yearly range below the 1.3300 support. The BoE’s Consumer Credit figures will come on March 30 alongside M4 Money Supply, Mortgage Approvals/Lending and Net Lending to Individuals. The BRC Shop Price Inflation is due on March 31, seconded by Q4 Current Account results, Nationwide Housing Prices, Business Investment, and the final Q4 GDP Growth Rate. The final S&P Global Manufacturing PMI is due on April 1, while the BoE’s DMP survey will see be out on April 2.
The persistent move higher in the Greenback motivated USD/JPY to surpass the 160.00 “line in the sand” for the first time since the summer of 2024, resuming its upside following the previous week’s hiccup. The BoJ Summary of Opinions is due on March 30, followed by Housing Starts and Construction Orders. The Unemployment Rate will be published on March 31 along with Industrial Production, Retail Sales, and the Tokyo CPI data. The Tankan survey is expected on April 1 ahead of the final S&P Global Manufacturing PMI. The weekly Foreign Bond Investment readings are due on April 2, prior to Monetary Base data. Wrapping up the docket will come the final S&P Global Services PMI on April 3.
A dreadful week saw AUD/USD break below the 0.6900 support for the first time since late January. The RBA will publish its Minutes on March 31, seconded by Housing Credit figures, Private Sector Credit data, the Ai Group survey and the final S&P Global Manufacturing PMI. Building Permits, Private House Approvals and Commodity Prices are due on April 1. On April 2, the Balance of Trade results will be the salient event.
Anticipating economic perspectives: Voices on the horizon
- The Fed’s Powell and Williams speak on March 30.
- The Fed’s Goolsbee and Bowman will speak on March 31.
- The Fed’s Musalem speaks on April 1, seconded by the ECB’s Cipollone.
- The Fed’s Logan is due to speak on April 2.
Central banks: Upcoming meetings to shape monetary policies
- The RBNZ meets on April 8 (2.25% act. vs. 2.25% exp.) alongside the RBI (5.25% act. vs. 5.625% exp.).
- The NBP will decide on rates on April 9 (3.75% act. vs. 3.75% exp.).
- The BoK meets on April 10 (2.50% act. vs. 2.50% exp.)
Nonfarm Payrolls FAQs
Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
