Foreign exchange traders bid up U.S. dollars ahead of Friday’s non-farm payrolls report. Given last month’s reaction to the surprisingly strong NFP number and the market’s expectations for another monthly improvement in the labor market, it is not entirely surprising to see the dollar strengthen against every major currency. Demand for dollars was so strong today that the greenback reached a 4 month high against the Japanese Yen on an intraday basis. The dollar’s ability to sustain its gains going forward will largely depend on Friday’s non-farm payrolls report. Nearly every labor market indicator including this morning’s jobless claims release suggests that there will be an improvement in NFPs – the only question is, by how much. Also, currency traders are much more interested in how the dollar will react following the release and therefore, we are focusing our discussion on how to trade non-farm payrolls. For our NFP Preview, read NFP Preview: 3 Reasons Why Job Growth is Possible.
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