After Focus On NFP Data, USD Gloomy Early Week


 The US dollar traded mixed at the end of last week but ended the final session of the week flat.

An interesting market reaction was seen when the publication of the United States (US) NFP employment data report in the New York session on Friday was quite mixed.

Looking at the data component, the increase in employment in November of 263,000 was higher than the forecast of 200,000. Meanwhile, the average hourly earnings jumped 2 times compared to the forecast to 0.6%, surpassing the previous reading of 0.5%.

This has prompted an initial surge in the value of the US dollar as soon as the report was published due to expectations that the Federal Reserve (Fed) may need to increase policy tightening again.

But after being digested, the increase in employment recorded actually did not succeed in overcoming the reading in October, and the unemployment rate remained high at 3.7%.

The US dollar ended the session on a gloomy note again, after trading weak for the previous few sessions.

With a less encouraging reading of the jobs report likely to prompt the Fed to slow down policy tightening.

However, there are still opposing views such as former US Treasury Secretary Larry Summers who sees the Fed still needing to raise interest rates again because there is still a long way to go before inflation reaches a stable level.

The recovering market sentiment is also seen not to support the strengthening of the US dollar at the beginning of this week.

Developments are becoming more positive in China when it is reported that movement restrictions are being relaxed in some focal locations such as Beijing and Shenzhen.

Next, some US economic data will be in focus this week such as the service sector survey (ISM) and the producer price index (PPI) in addition to several central bank policy meetings will be monitored by the market.