All eyes are on the U.S. dollar’s movements as the new fiscal year begins

All eyes are on the U.S. dollar’s movements as the new fiscal year begins

01.04.2022

The U.S. dollar showed strength against both the euro and the yen yesterday, with the USD/JPY pair rising from 121.28 to 122.73. Meanwhile, for today’s U.S. employment report, the market forecast for nonfarm payrolls stands at 490,000, while the unemployment rate is expected to be 3.7%, down 0.1 percentage points from the previous reading. We should pay close attention to price movements following today’s employment report release.

Amid reports of ceasefire talks between Russia and Ukraine, European currencies fell across the board, with the euro-pound pair dropping by about 100 pips from 0.851 to 0.841. From a technical perspective, since the euro-pound pair has entered a corrective decline after breaking above the 200-day SMA on the daily chart, we should keep an eye on whether a further rebound will occur, while also considering the possibility of a decline toward the recent low around 0.831.

Today, during European trading hours, the Swiss Manufacturing PMI will be released at 16:30, the UK Manufacturing PMI at 17:30, and the Eurozone Consumer Price Index (flash estimate) at 18:00. Once U.S. trading hours begin, the U.S. Employment Report is scheduled for 21:30, and remarks by U.S. Federal Reserve Bank of Chicago President Evans are set for 22:05:Chicago Fed President Evans’ remarks, the U.S. Manufacturing PMI at 10:45 PM, the U.S. ISM Manufacturing Index at 11:00 PM, and U.S. Construction Spending. Now that the new fiscal year has officially begun, we want to closely monitor how the foreign exchange market will move.