Today’s US Non-Farm Payroll report is the focal point for market participants, with consensus estimates pointing to 169k new jobs in January and an unemployment rate holding steady at 4.1%. Average hourly earnings growth is expected at 0.3% month-over-month, maintaining the robust wage gains of recent months.
There are indications the data could surprise to the upside. Latest ISM surveys showed employment components improving, with manufacturing’s gauge jumping from 45.4 back into expansion at 50.3, and services employment rising to 52.3 from 51.3. ADP private payrolls number also showed a solid 183k increase, little changed from December’s 176k. Meanwhile, initial jobless claims remain near historical lows, with the four-week moving average inching up only slightly from 213k to 217k.
If today’s jobs report beats expectations, the case for Fed to maintain its pause on easing for longer would strengthen. However, persistent uncertainties—especially US trade policies—may limit the Dollar’s ability to rally significantly. While a strong labor market may keep rate cuts at bay, investors will weigh other geopolitical and economic factors before pushing the greenback through key near term resistance levels.
Technically, Dollar Index is currently extending the consolidation pattern from 110.17 short term top. In case of deeper pull back, downside should be contained by 38.2% retracement of 110.15 to 110.17 at 106.34 to bring rebound. On the upside, firm break of 110.17 is needed to confirm resumption of recent up trend. Otherwise, outlook would remains neutral for more sideway trading.
