020 7898 0500It was unusual for the US dollar not to be moved more by the non-farm payrolls figure on Friday, which came in higher than expected. 235,000 jobs were created in February, against expectations of just 190,000. However, the figure was slightly down on the 238,000 released for January.
Markets are firmly focused on the Federal Reserve meeting this Wednesday. A rate hike is very likely. Markets have even begun to price in a chance that the potential hike could be above the 0.25% mark, which would probably give the dollar a significant boost. This is in sharp contrast to the monetary easing policy by the ECB and BoE.
The real question is, will the interest rate hike be enough to push the dollar through its fairly strong resistance levels against a number of currencies which have to date (although only just) managed to push back against the dollar?
The resistance levels of the past three to six month, particularly for the euro and pound, have held strong. Over the course of the coming weeks/months, with Article 50 being triggered and the Dutch and French elections coming up, it remains to be seen whether these levels can be maintained. All of these factors are indicators of very high volatility to come.
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