FX outlook

Markets are patiently waiting for the monthly US payroll which shows the current state of labour market. Over the past couple of months, the market has seen a strong consistent labour market. Will this month be the same?!

Mario Draghi of the ECB during the press conference yesterday about the state of the European economy, he highlighted some slacks in the economy and explained different measures put forward to correct it. He explained the quantitative easing will continue till September 2016 and he downgraded the inflation forecast for 2015/2016. This comment push down Euro across the board and indices rallied.

Non-farm payroll data today will send a strong signal about potential rate hike in the US as early as September. Traders and investors might start to hold USD position and dump Indices. Commodity prices are likely to dive as well as the rate hike is likely to weigh on their prices. Unemployment figures will also be released today: unemployment is expected to have decreased from 5.3% to 5.2%. If all these figures come just as expected, then this is very bullish for USD. If the Non farms payroll data comes bellow expectation, we will see a massive sell off on USD and bullish Commodity.