Article by ForexTime
The Dollar was explosively volatile on Friday with prices aggressively appreciating towards 94.27 as investors digested September’s distorted U.S jobs data.
The US economy lost 33,000 jobs in September. Under normal circumstances, this abysmal headline NFP data would have sparked concerns over the strength of the US jobs market, but commentators are aware that the figure was heavily distorted by the Hurricane disruptions. The 0.5% m/m rise in hourly wages played a leading role in the dollar’s sharp appreciation, which boosted optimism over inflation picking up. With the unemployment rate hitting its lowest level since 2001 at 4.2%, the overall report was encouraging and should support expectations of higher US interest rates.
With the FOMC likely to recognise the sharp decline in September’s NFP as a one-off event due to the hurricane season, the dollar should remain supported moving forward. Looking beyond today’s distorted U.S jobs report, economic data from the US this week has been positive and, with sentiment still bullish towards the US economy, further upside on the dollar is expected.
From a technical standpoint, the Dollar Index is bullish on the daily charts. The breakout above 94.00 should encourage a further incline towards 94.30 and 94.50, respectively.
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Article by ForexTime
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