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U.S. Dollar Back To Gains

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On Friday, the U.S. dollar traded higher on strong U.S. data as the average hourly earnings rose as much as 0.4% and pushed the year-on-year increase in earnings to 2.9%. In addition, Nonfarm payrolls added 156k jobs in December and unemployment rate rose 4.7%. Despite the growth of US jobs being less than expected, it was still higher than the target rate of 150k jobs. On the other hand, the U.S. economy could add 2.16 million jobs by the end of the year, at an average of 180k jobs per month.

The U.S. dollar index settled above 102 pips and touched 102.20 at the end of last week’s trading session.

Also on Friday, Gold prices declined to $1,170, retreating from the previous sessions as the Greenback strengthened after the release of strong US employment figures. The increase in wages would support the view that the U.S. Federal Reserve is expected to hike interest rates three times this year.  Technically, the yellow metal could decline further to $1,160 during the day.

Euro declined at the end of last week’s trading session after touching $1.06, negatively affected by a strong U.S. data and due to the variation between the U.S. and European monetary policy.

GBP pared its gains vs. USD, on a strong USD and as UK retail sales fell. Cable settled below $1.23 and could decline further to $1.22.

Oil prices settled at the end of last week’s trading session as the dollar strengthened. Although, US crude traded at $53.70, as the US inventories declined.

The most important economic events:

  • EUR Euro-Zone Sentix Investor Confidence (JAN): (GMT: 11:30) – Medium – Forecast (12.8) – Previous (10).
  • EUR Euro-Zone Unemployment Rate (NOV): (GMT: 12:00) – Medium – Forecast (12.8) – Previous (10).

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The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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