US Dollar: forecast for October 5-11

By Kira Iukhtenko

US Dollar was hit by the weak labor market data released on Friday. US economy added only 142K new jobs in September, while the October reading was revised down to 136K. Average hourly earnings showed zero growth, confirming the deflationary pressures in the US economy.

As a result, expectations for the Fed’s rate hike in 2015 fell sharply and are gradually switching to March 2016. Short-term USD prospects worsened: next week we expect to see more downside versus the safe haven currencies. As for the commodity block pairs, USD depreciation is limited. For the mid-term investors it is advised to use the current pullback as a buying opportunity for the greenback.

On the new week United States are to release a bunch of important figures. Watch the ISM non-manufacturing PMI on Monday and the trade balance on Tuesday. Market attention will be focused primarily on the FOMC meeting minutes release on Thursday. On the September 17th meeting 13 out of 17 member supported a rate hike in 2015. Investors hunger for more details of the long-awaited meeting.

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