US Dollar Stays Firm Awaiting NFP Report
The US dollar is stable against the euro and the yen amid a trade confrontation between the US and China. At the same time, the yen and the Swiss franc rise in price against almost all other currencies due to increased risk aversion and flight to defensive assets. The dollar index rose by 0.1% to 90.54 on Friday. On a weekly basis, it was up more than half a percent and on track for its biggest weekly rise in six weeks.
US President Donald Trump instructed US trade representative Robert Lighthizer to explore the possibility of expanding the list of Chinese goods subject to increased import duties by $100 billion in addition to the $50 billion already announced. China's Ministry of Commerce in return promised to introduce new measures if Washington extends the restrictions on import of Chinese goods to the US.
Markets are focused on monthly US payrolls numbers.The NFP report is expected to show the US economy added 188k new jobs in March. This is substantially lower than the previously reported 313k. Earlier in the week, ADP reported the private sector added 241k jobs last month so there may be some volatility in the NFP report number. Average Hourly Earnings are expected to jump 0.3% versus the previously reported 0.1%. This number is important to the Fed because it indicates inflation. The higher the percentage change, the greater the chances the Fed will stick with its aggressive strategy to raise rates at least 2 more times this year.