Today’s NFP data will do a major impact on Wednesday’s FED decision. A rate hike is already priced in, yet the path for future rates and the smooth transition from Chair Yellen to Chair Powel will have the major impact on the dollar. A strong data will be supportive and the dollar will rally.
The most important figure today is the Average Hourly Earnings. Even if the NFP figure is good but the average hourly earnings is less then 0.3%; the dollar will be hit. For the dollar to be supported the data should be around or above the following:
Non-Farm Payrolls: 170,000 and above.
Average Hourly Earnings: 0.3% and above.
Unemployment Rate: unchanged at 4.1%.
Volatility is expected, further spread widening before and during the release of the news, be cautious.
All eyes will be towards next week’s FOMC two days meeting, MARKET REACTION MIGHT DIFFER THAN USUAL.