The US dollar rallied today following better-than-expected macroeconomic releases in the United States. Now, traders wait for tomorrow’s nonfarm payrolls.
The major piece of news today was the tariff cut by China on $75 billion worth of US goods. Tariffs of 10% on some goods will be reduced to 5%, and 5% tariffs will be reduced to 2.5%. The retaliatory tariffs, implemented in response to the similar levies slapped by the United States on Chinese imports, were cut under the “phase-one” trade deal reached in January.
As for US data, the US Department of Labor reported that the number of initial claims for unemployment benefits fell from 217,000 to 202,000 last week, below the consensus forecast of 215,000. The US Bureau of Labor Statistics will release nonfarm payrolls on Friday. Analysts predicted that the official employment report will show an increase of 161,000 in January. Released on Wednesday, a private employment report from Automatic Data Processing showed a huge increase of 291,000, which substantially exceeded the analysts’ median forecast of a 157,000 gain. While nonfarm payrolls do not always show results similar to ADP data, yesterday’s surprisingly good data led to speculations that nonfarm payrolls may beat expectations as well. If that is the case, the dollar will likely extend its rally.
EUR/USD dropped from 1.0999 to 1.0975 as of 16:15 GMT today. GBP/USD declined from 1.3002 to 1.2930. USD/JPY rallied from 109.81 to 109.97.
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US Dollar Gains After Positive Economic Reports
