Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Will Payrolls Reinforce U.S. Dollar’s Dominance?

By Kathy LienForexApr 02, 2021 03:21
Will Payrolls Reinforce U.S. Dollar’s Dominance?
By Kathy Lien   |  Apr 02, 2021 03:21
Saved. See Saved Items.
This article has already been saved in your Saved Items

After rising strongly in March, the U.S. dollar kicked off the month of April with losses against most of the major currencies. The sell-off was modest and represents nothing more than profit-taking ahead of Friday’s non-farm payrolls report. Jobless claims rose back above 700,000, but that increase will not draw away from what should be a very strong jobs report. The four-week moving average continued to fall to its lowest level in more than a year. With restrictions easing across the nation, restaurants expanding capacity and the weather improving, businesses are hiring. Consumer confidence is also at a one-year high, with private payroll provider ADP reporting three times more job growth in April than March.

Economists expect non-farm payrolls to rise by 647,000, which would be the strongest month of job growth since October. The unemployment rate should improve, but average hourly earnings growth is expected to remain slow. Tomorrow’s forecast is a lofty one, but there’s no doubt that the momentum in the U.S. economy is accelerating and businesses are hiring. As shown below, all of the related indicators for non-farm payrolls that we typically watch point to a strong NFP report. In fact, there’s a good chance Friday’s number will beat, which would reinforce the U.S. dollar's dominance and inspire fresh gains in the currency. USD/JPY at 112 is not out of the realm of possibility. Even if job growth misses, with payrolls rising by only 500,000 for example, the pullback in the U.S. dollar should be short-lived because 500,000 is still a very good number and, more importantly, U.S. President Joe Biden’s infrastructure plan and the overall recovery will accelerate job growth in the coming months.

Arguments in Favor of Stronger Payrolls

1. ADP private payroll growth rises to 517,000 from 176,000
2. Four-week average jobless claims falls sharply in March
3. Continuing claims sink below 4 million
4. Consumer Confidence index surges to one-year high
5. University of Michigan sentiment index surges to one-year high
6. Challenger reports fewer job cuts
7. Employment component of ISM manufacturing rises sharply

Arguments in Favor of Weaker Payrolls


For the second day in a row EUR/USD held 1.1700. The upwardly revised Eurozone manufacturing PMI report overshadowed weaker retail sales. While the improvement in manufacturing is encouraging, the slowdown in consumer demand is worrisome, particularly as spending is likely to weaken further with new restrictions. The UK’s manufacturing PMI report was also revised higher, driving GBP/USD above 1.38.

The best performing currency was the New Zealand dollar. Consumer confidence weakened in March, according to ANZ, but as a currency with generally bigger moves, it benefitted the most from the pullback in the U.S. dollar. Despite an unexpected improvement in building permits and higher oil prices, the Canadian dollar refused to rally. The Australian dollar recovered earlier losses to end the day unchanged against the greenback. The latest Australian economic reports were mixed, with the manufacturing PMI index rising slightly to 59.9 from 58.8, retail sales falling less than expected and the trade surplus shrinking to $7.5 billion from $9.6 billion (economists were looking for an improvement)

Will Payrolls Reinforce U.S. Dollar’s Dominance?

Related Articles

Will Payrolls Reinforce U.S. Dollar’s Dominance?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email