Dollar Gains Momentum ahead of Fridays NFP

Daily Update - 4th January 2017

Yesterday’s Market

• EUR Unemployment Rate and Change
• US ISM Prices Paid, ISM Manufacturing PMI & FOMC Minutes

Yesterday Explained

Positive labor data helped Euro to continue its upward momentum early in the day. Later in the day, Dollar snapped its recent decline ahead of upbeat ISM Prices and FOMC Minutes release. The Fed's minutes acknowledged the U.S. labor market's solid gains and the expansion in economic activity, however there is worry about persistently low inflation.

Minutes also included that FED will continue to pursue a gradual approach in raising rates but could pick up the pace if inflation accelerates. Fed officials also discussed the possibility that the Trump administration's tax cuts or easy financial conditions could cause inflation pressures to rise, leading to some dollar-buying. 

Today’s Market

• EUR Markit Services PMI & Markit PMI Composite
• GBP Consumer Credit & Mortgage Approvals
• USD ADP Employment Change, Initial Jobless Claims, Markit Services PMI

Today’s Focus

A rather busy day with several mid-tier reports been released from Euro zone, UK and USA. First up will be market services and Markit PMI composite figures from Euro zone which are related to economic conditions in Euro zone. These will be followed by Consumer Credit and Mortgage Approvals from UK are data related to Consumer Consumers borrowing credit and number and approved mortgages.

The final half will be full of US data, connected to US labor market. Positive data could support Fridays Non-Farm Payroll and could strengthen the Dollar in the short term.