American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Investing

US dollar index (DXY) analysis ahead of the nonfarm payrolls data

by admin February 6, 2025
February 6, 2025
US dollar index (DXY) analysis ahead of the nonfarm payrolls data

The US dollar index retreated this week as the recent tariff fears waned. The DXY index dropped to a low of $107.75, down by 2.20% from its highest point this year as focus shifted to the upcoming non-farm payroll (NFP) data. So, is the US dollar index a good asset to buy today?

US nonfarm payroll data ahead

The US dollar index pulled back this week after Donald Trump dialed back his tariff talk. He paused tariffs on Mexican and Canadian goods and hinted that he was open to negotiate with China, the second-biggest trading partner. 

The DXY index cooled after a report showed that the number of job vacancies in the US cooled in December. They fell by 556,000 to 7.6 million, lower than the median estimate of 8.2 million.

Another report by ADP showed that the private sector created 186k jobs in January, higher than the 140k it added a month earlier.

The main economic data to watch this week will be the upcoming nonfarm payroll (NFP) data scheduled on Friday.

Economists expect the data to show that the economy added 154k jobs in January after creating 256k jobs a month earlier. The unemployment rate is expected to remain 4.1%, while wage growth is expected to have remained a 3.9%.

The nonfarm payroll jobs numbers are important for the US dollar because they affect the Federal Reserve interest rates trajectory. They are part of the Fed’s dual mandate, with the other part being on inflation. 

Fed is focusing on inflation

However, this week’s NFP report will likely have a muted impact on the US dollar index because the Fed is not putting a lot of emphasis on the labor market. Instead, it is focusing on inflation, which has remained steady in the past few months. 

The Federal Reserve believes that the labor market is strong even as the unemployment rate has remained above 4% for months. In an emailed statement to Invezz, Tod Jankins, an analyst at PIMCO said:

“We expect the jobs numbers to have an immaterial impact on the US dollar and equities. Nonetheless, a sharp deterioration may be a wakeup for the Fed and push officials to recalibrate their policies.”

The US will publish the January inflation data next week. Analysts expect the headline Consumer Price Index (CPI) to move from 2.9% in December to 3.0% in January, driven by the recent wildfires in California and their impact on housing and insurance. 

The DXY index will react to the upcoming Bank of England (BoE) interest rate decision. Analysts expect the bank to start cutting interest rates by 0.25% and deliver a dovish tone. The BoE’s actions are important because sterling is a key part of the US dollar index.

US dollar index technical analysis

DXY chart by TradingView

The daily chart shows that the DXY index peaked at $110.15 earlier this year as hopes of a more hawkish Fed remained. It has now pulled back and hovering at $108, the 23.6% Fibonacci Retracement point. 

The pair has also remained slightly above the 50-day moving average, a sign that bulls are still in control for now. It has also remained above the key support at $106.50, the highest swing in April 2024. 

Therefore, the DXY index will remain in an upward trajectory as long as it is above the 50-day moving average. Such a move will see it retest the year-to-date high of $110. A drop below that moving average will see it drop to the 50% retracement point at $105.

The post US dollar index (DXY) analysis ahead of the nonfarm payrolls data appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Optimism price analysis: key levels to watch as OP forms classic reversal pattern
next post
Here are the best performing dividend aristocrats stocks in 2025

Related Posts

Exploration Program Underway at Corvette River Lithium, Gold,...

July 24, 2024

Update on “Expressions of Interest” RFI Process

July 11, 2024

Nevada Organic Phosphate Announces Expiry of 27,575,240 Share...

May 28, 2024

Is Progress Software a better investment than Palantir...

September 10, 2024

​Tech 5: Tech Stocks Volatile as Recession Fears...

August 6, 2024

Chegg stock price outlook: could CHGG surge 75%...

November 10, 2024

Applied Materials stock has dived: is it safe...

December 18, 2024

Steppe Gold Enters Into Share Exchange Agreement to...

April 17, 2024

Is Shopify stock price about to explode higher...

January 30, 2025

Nio stock price forecast: Here’s why it could...

January 9, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Interview: Strategic location gives Brazil Potash cost advantage in domestic fertiliser market, says CEO Matt Simpson

      June 1, 2025
    • Canada’s Q1 GDP expands by 2.2%, driven by exports spike ahead of potential US tariffs

      June 1, 2025
    • President Trump to host farewell for Elon Musk as DOGE leader steps away

      June 1, 2025
    • UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars

      June 1, 2025
    • Trump wants Apple to shift iPhone production from India to the US: here’s what it means

      May 18, 2025

    Categories

    • Business (3,022)
    • Investing (2,459)
    • Latest News (1,994)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved