Exciting Start to the Year in Forex: US Labor Market Data in Focus

Get ready for an exciting start to the 2024 trading year! Next week, the US and Canada Job Reports are to be released, along with inflation figures from the Eurozone. Additionally, the FOMC will release the minutes of its latest meeting.

Here’s what’s coming up next week: 

The start of the 2024 trading year will be marked by crucial economic reports that will impact monetary policy expectations from the Federal Reserve (Fed) and the European Central Bank (ECB). The action will kick off on Tuesday after the holiday break.

In the US, the focus will be on labor market data, with the JOLTS Job Openings on Wednesday, followed by the ADP Employment Report and Jobless Claims on Thursday, and Nonfarm Payrolls on Friday. Moreover, the ISM Manufacturing and ISM Services reports are scheduled for release on Wednesday and Friday, respectively. The market will also be closely watching the FOMC minutes of the December meeting, which is set to be released on Wednesday.

TD Securities analysts on the Fed

The Fed has been considering the case for policy easing in 2024 due to an improving inflation outlook and the possibility of rising real rates. Fed officials, however, have indicated that they are not considering imminent easing, despite Powell hinting at this potential during the Dec FOMC meeting. We expect the minutes to reveal that the FOMC is not yet considering rate cuts. 

After the festive season’s rally, a new challenge awaits Wall Street. In 2023, stocks closed the year with significant gains, reaching record highs. The big question now is whether this momentum will continue next week or if a correction is due.

US Dollar price movements this week

See the table below to find the change in the US Dollar (USD) versus the listed major currencies this week. Notably, the US Dollar weakened the most against the Swiss Franc.

 
USD
EUR
GBP
CAD
AUD
JPY
NZD
CHF

USD
 
-0.36%
-0.30%
-0.46%
-0.54%
-1.13%
-0.72%
-1.96%

EUR
0.46%
 
0.09%
0.02%
-0.11%
-0.74%
-0.26%
-1.49%

GBP
0.43%
-0.14%
 
0.11%
-0.22%
-0.86%
-0.24%
-1.79%

CAD
0.46%
-0.22%
0.10%
 
-0.34%
-0.67%
-0.09%
-1.64%

AUD
0.54%
0.13%
0.19%
0.08%
 
-0.65%
-0.16%
-1.63%

JPY
1.12%
0.80%
0.65%
0.95%
0.62%
 
0.62%
-0.96%

NZD
0.71%
0.30%
0.43%
0.25%
0.14%
-0.49%
 
-1.17%

CHF
2.11%
1.46%
1.47%
1.62%
1.63%
0.96%
1.25%
 

The heat map below shows how the major currencies have moved against each other in percentages. The base currency is chosen from the left column, while the quote currency is chosen from the top row. For instance, if you select the Euro from the left column and move across the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

The US Dollar Index (DXY) experienced its third consecutive weekly loss as market participants anticipate Fed rate cuts in the new year. Although the index managed to avoid bottoming out, its performance has been closely monitored.

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