Dollar Shows Strength Ahead Of The U.S. Nonfarm Labor Report

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The U.S. dollar was mostly defensive against its global peers on Friday as investors await U.S. nonfarm jobs report later today. Positive jobs data should raise hopes of a possible interest rates hike by the Fed this year. Fed officials are meeting at the agency’s headquarters in Washington, D.C. on March 15- 16 to possibly discuss the way forward with interest rates.

EUR/USD pair

The common currency Euro was nearly flat but strong against the greenback at 1.0947. The previous session saw Euro up 0.8% to pull out of its one-month low of 1.0825.

However, some pressure seems to have come out of the common currency as the Eurozone struggles with a cooling economy. The region’s central bank is mulling an easing measure to try and fuel economic growth.

USD/JPY hold steady

USD was mostly steady against the Japanese Yen at 113.62 on Friday, but far off its previous session’s high of 114.28.

It appears the demand for Yen, best known as the safe-haven, softened as the oil market showed signs of strengthening prices. Oil prices sitting above $34/barrel seem to suggest easing global supply glut.

AUD/USD pair jump

The Australian dollar gained 0.10% against the USD to sit at 0.7359. The Aussie currency edged up against the greenback despite the domestic retail sales data showing slower growth of just 0.3% in January compared to 0.4% that economists expected.

Economic data

The dollar seems to have lost momentum following mostly downbeat U.S. economic data on Thursday. The Institute of Supply Management (ISM) reported that its February services sector employment index dropped to 49.7 in February from a reading of 52.1 in January. That marked the first decline in the service sector job numbers since February 2014.

Additionally, the U.S. labor department also reported a spike in first jobless benefits filings last week with the reading rising to a four-week high.

The U.S. Dollar Index contracted 0.65% to touch an intraday low of 97.46 but later gained momentum to finish higher at 97.61. The index weighs the greenback against six global currencies.

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