According to the latest Non-farm payroll report on Friday, 295,000 people got jobs in February, shocking the global markets as the average forecast sat only at 235,000. Considering the recent severe cold storm in the Northeast, the result is unbelievably great. The Dollar Index surged to 97.70 after the release as all major peers surrendered in front of the unparalleled strength of the US Dollar. Now, it seems like Fed officials have no reason to delay the rate hike as the unemployment rate has also fallen to 5.5%, reaching the long-term unemployment rate target set by FOMC. It is the first time since the financial crisis.
FOMC are almost certainly going to replace the ‘patience’ in their March 18th statement and probably will become the first to raise interest rates in an advanced economy in 2015. Even though participants have known that the bull positions of the Dollar are extremely high now, the market still cannot find a single reason to short the Dollar. As smart traders should always remember, a trend is a friend, following the trend and never against it. As long as no reversal signs pop out, the bullish trend of the USD will continue.
The Euro fell to a more-than-11-year low of 1.0840, breaking the thousand-pip integer level of 1.10 with little difficulty. The next bear target is probably 1.0760, which was the September 2003 low.
Looking across the seas now. The double top pattern at 0.76 and the breakout of the trendline tells us that the rise of Kiwi Dollar has ended. The bears only took one week to erase all gains of February. The result of the dairy auctions last week was no longer as bright as the prior two results, triggering a retreat horn. I won’t be surprised if NZDUSD hits a new low in the next few days.
Looking to the stock markets, the Shanghai Composite lost 0.22% to 3241. The Nikkei Stock Average gained 1.71%. Australian ASX 200 closed as unchanged. In European markets, the UK FTSE was down 0.71%, the German DAX gained 0.41% and the French CAC Index rose 0.1%. The US stocks slumped as upbeat job report increase the rate hike speculation. The S&P 500 closed 1.42% lower at 2071. The Dow lost 1.54% to 17856, and the Nasdaq Composite Index slid 1.11% to 4927.
On the data front, Japan’s revised GDP will be released at 10:50 AEDST. Eurogroup meetings later today may attract some attentions.
Have a great trading day!
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