FOREX
The US Dollar Index is rising during early Thursday trading, ahead of the publication of a batch of American economic data later in the day, with the Non-Farm Payrolls coming tomorrow. NFP’s are perhaps the most important event in the economic calendar for foreign exchange traders, however tomorrow’s number will carry even more weight than usual. The narrative in the markets has been dominated by the risk of high inflation becoming a collateral effect of the ongoing gargantuan stimulus. The Fed has, so far, refused to blink, insisting that any spikes in prices are likely to be temporary and that bringing forward the tapering could damage the economic recovery. Amidst this tug-of-war, employment is likely to become a decisive factor, with a high reading having the potential to force the Fed to start thinking about tapering its current monetary and asset purchase policies. Looking at today’s dollar gains, it appears that many investors are already positioning themselves for such a scenario.
Ricardo Evangelista – Senior analyst, ActivTrades
