The key focus for Friday’s forex trading is likely to be the release of US jobs data for March. So what might traders expect, particularly in light of the fact that the February nonfarm payroll (NFP) figure sprang a complete surprise, coming at 313,000 while the consensus had been for a 200,000 rise. On this occasion economists polled by Reuters are looking for a 198,000 rise. Traders might also wish to keep an eye out for any revisions to the February number. Additionally, the same poll expects the US unemployment rate to fall by 0.1 per cent in March to 4.0 per cent. If that occurs it would be the lowest print for US unemployment since December 2000. Again, however, traders might wish to look at the participation rate to see if any change is wholly attributable to job creation or whether it also reflects any increase in the number of those who have dropped out of the data as they are currently not looking for employment.
Finally, there is the average hourly earnings (AHE) figure to look out for. Again traders may wish to look out for any prior revisions but also keep an eye out for the accompanying average hours worked figure. When January’s 2.9 per cent annualized AHE figure spooked markets it was in part due to a weather-influenced reduction in average hours worked rather than a real sign earnings had taken off. That said, the Reuters poll of economists sees AHE rising 0.2 percent in March after gaining 0.1 percent in February. That would translate into an annualised rise in AHE to 2.7 per cent in March from February’s 2.6 percent.
Written by Neal Kimberley, External Currency Analyst.