US Jobs Data, Powell in Focus

A strong US jobs report could see dollar strength. A speech from Fed Chair Powell will also be in focus.

Previous Day's Market Highlights

The pound was broadly softer yesterday as Services PMI also disappointed market expectations, a drop that was partially attributed to the effects of bad weather. The dollar’s bid tone did little to help, and sterling-dollar briefly fell below 1.40 to its lowest levels since 19 March. Euro-dollar tested lows around 1.2220. Sterling-euro was a touch softer but again held above 1.14.
 
The dollar weakened only briefly in the afternoon as data showed a wider-than-forecast trade deficit in February and an uptick in weekly Initial Jobless Claims.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1438 1.1538 1.1202 2.91%
GBP/USD 1.3995 1.4245 1.3788 3.21%
EUR/USD 1.2236 1.2477 1.2218 2.08%
GBP/AUD 1.8247 1.8509 1.7599 4.92%
GBP/NZD 1.9307 1.9644 1.8925 3.66%
GBP/CAD 1.7894 1.8417 1.7726 3.75%

Today's Market Highlights

The main event of the day is the US’s highly anticipated monthly jobs report (13:30 BST). While the Nonfarm Payrolls figure has typically been a source of market volatility, investors have been increasingly reacting to the average earnings figures as they look for signs of rising wage pressures.
 
With a solid number of jobs expected to have been added to the economy, an expected increase in wage growth, and a potential dip in the Unemployment Rate to 4.0%, a new low since December 2000, the dollar could be primed to strengthen, particularly if any of the figures beat expectations. However, there may be a greater risk to the downside if the figures instead miss forecasts, in which case the dollar could weaken.  
 
Canada also releases its jobs data this afternoon, with the Unemployment Rate forecast to remain unchanged at 5.8%. A slight rise in Net Employment could be favourable for the loonie, but the release’s overall market impact may be relatively contained unless there are any surprises.
 
BoE Governor Carney is speaking at the International Climate Risk Conference for Supervisors, which will likely have little market impact unless monetary policy discussions come into play. Later this evening, after the European close, Fed Chair Powell is to speak on the economic outlook, which could pose some event risk for the dollar.  

Today's Economic Calendar

Time Currency Release Consensus Previous
13:30 USD Nonfarm Payrolls (Mar) 185K 313K
13:30 USD Average Hourly Earnings YoY (Mar) 2.7% 2.6%
13:30 USD Average Hourly Earnings MoM (Mar) 0.3% 0.1%
13:30 USD Unemployment Rate (Mar) 4.0% 4.1%
13:30 CAD Unemployment Rate (Mar) 5.8% 5.8%
13:30 CAD Net Change in Employment (Mar) 20.0K 15.4K
15:00 CAD Ivey Purchasing Managers Index s.a. (Mar) 60.2 59.6
16:15 GBP BoE Governor Carney Speaks
18:30 USD Fed Chair Powell Speaks

Caxton