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Dollar: what to expect from the US jobs data

FX:EURUSD   Euro / U.S. Dollar
The greenback saw mixed dynamics on Thursday as safe-haven demand has waned somehow amid easing geopolitical tensions in the Middle East amid the US-Iran conflict. As Trump has calmed down global markets, the threat of a full blown war receded, along with risk aversion.

Now, market focus gradually shifts to the upcoming US jobs report due later today. As a reminder, the API data pointed to a rise in private sector employment by over 200,000, while the November figure was revised substantially higher. Judging by this report, one can expect strong numbers today, which in turn may push the greenback higher across the board. But it should be noted also that the ADP and NFP data are not often correlated, so there is a risk that the release may disappoint. By the way, apart from jobs data, wages will also matter for market participants as this component serves as an inflation indicator.

Anyway, as the USD index remains relatively elevated, further signs of easing geopolitical concerns could prompt some profit taking in the dollar against high-yielding currencies. As for EURUSD , the pair briefly dipped below the 1.11 handle on Thursday and failed to stage a decent recovery. As long as the euro remains below the 200-DMA at 1.1140, bearish risks prevail.

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