Dollar Near Long-Term Highs Ahead of Jobs Report

Chart of the U.S. Dollar Index (USD Index)
Chart of the U.S. Dollar Index (USD Index) – Source: TheTechnicals.com and TradingView

The closely-watched U.S. jobs report for March is up first thing Friday morning. And dollar and bond traders are bracing for potential impact. As we approach the non-farm payrolls release, the U.S. dollar index (the primary value measure of the U.S. dollar against a basket of other major currencies) sits not far from long-term highs.

Dollar Remains Strong Despite Economic Growth Worries

The persistent strength of the dollar in the past several weeks and months has recently been a key macro market theme. The strong dollar has defied lowered interest rate expectations and increasing worries of a slowdown in U.S. economic growth. These growth worries were exacerbated last month when the February jobs report fell far short of expectations at only 20K jobs added against prior forecasts for 180K. More recently, though, positive global manufacturing data released early this week prompted some doubts about slowing growth concerns.

What Might Be Expected for Non-Farm Payrolls

Friday’s headline jobs number is expected to come in around 175K jobs added in March. A better-than-expected number on Friday morning could boost the dollar index back up towards the 97.70-area resistance highs (recently tested in November, December, and March). Such lofty levels had not previously been seen since mid-2017.

Another disappointing number, however, could signal a swift dollar retreat, much like the dismal jobs data last month prompted a strong pullback in the index. That pullback brought the U.S. dollar down sharply from the noted 97.70 highs to the sub-96.00 level.

In any event, whichever way the jobs data goes, expect heightened volatility for the dollar shortly before, during, and after the release.


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Disclosure: At the time of this article’s publication, we have no position in any security or trade/investment mentioned, nor do we have any business relationship with any company whose stock may be mentioned.

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