It was a bit of a choppy end to the week for the dollar on Friday, as, although it strengthened following some positive non farm payrolls data, disappointing wage growth made the move more sedate than it might have otherwise been. Non farms showed a 228,000 increase against an expectation of 200,000 which shows healthy signs of economic recovery.
However, the disappointing wage data increased concerns that the Fed are less likely to increase interest rates in 2018. Obviously there could easily be a bounce back in the near future, but we will have to wait and see.
Nevertheless, a rate hike this week is still on the cards as the Fed meet on Thursday. While they are still aiming for interest rates to be 2.75% by the end of 2019, the market forecasts a far more modest 2%. Again, this could change depending on what data we see in the coming months.
Retail sales are also scheduled for release this week and are expected to rise by 0.3%. Industrial production is also forecast to show a rise of 0.4% along with some positive PMIs. This would signal a steady pace of growth for the final quarter of 2017.
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