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US Dollar Strengthens Ahead of US Job Numbers Release; Oil Prices Continue to Improve
Published November 3, 2017
Data on US Non-Farm Payrolls was released this morning at 8:30 AM EST; a gain of 310,000 jobs was forecasted in a bounce back from the previous month’s decline of 33,000 jobs brought on by the summer hurricane season.
Investors will also look to data on average hourly wage growth for American workers for a better gauge of current inflation in the US; strength in the labour market and US inflation is supporting the Federal Reserve’s decision to raise interest rates in December.
Released at 8:30 AM EST: figures on Canadian employment change, unemployment rates and trade balance. Investors and the Bank of Canada are looking for greater strength in the Canadian economy to gauge timings and likelihoods for future interest rate hikes.
US President Donald Trump confirmed yesterday that Jerome Powell will replace Janet Yellen next year as Federal Reserve Chair; Powell’s service at the Fed with Yellen for the past five years is leading markets to suggest that the new Fed chair’s monetary policy will be continuation of Yellen’s mandate.
USD/CAD is higher again this morning after general weakness brought on by Powell’s nomination weighed the US dollar down; markets also reacted to the release of the US tax bill proposal which confirmed a proposed cut of the corporate tax rate to 20% as well as numerous other changes to individual tax brackets.
President Trump is set to start a diplomatic mission to Asia today including stops in Japan, South Korea and China; the president’s focus in China is expected to be on trade issues and ongoing efforts to contain North Korea’s nuclear missile program.
Oil prices continue to strengthen as WTI saw weekly gains of 1.6% after hitting its highest closing price since July 2015; price increases for the commodity were brought on by hopes that OPEC and other major producers will extend their production agreement at their meeting on November 30.