How to trade the US dollar this week?
Demand for the US dollar was supported by the strong labor market data on Friday. US Non-Farm Payrolls (NFP) came at 257K vs. 236K expected. December reading was revised up from 252K to 329K. Average hourly earnings rose by 0.5%. That’s higher than +0.3% change expected.
As a result, the news revived expectations for the Fed’s rate hike in mid-2015. 10-year Treasury yields surged to a 4-week high on the news, while the USD index pushed to 95. From now on we expect the long-term bullish USD trend to resume.
On the new week we recommend you paying attention to the retail sales and unemployment claims on Thursday and to the consumer sentiment index on Friday. The figures are unlikely to spoil the current USD-bullish market sentiment.