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It’s a brand spankin’ new trading month and you know what that means! It’s NFP week, yo! Check out the catalysts that might rock the dollar this week.

NFP report and its leading indicators

Can’t call it non-farm payrolls (NFP) week without the buildup and actual printing of the NFP report on April 6 at 12:30 pm GMT!

Before we see Uncle Sam’s labour market figures, traders will likely look for cues from economic reports such as the ISM manufacturing (April 2, 2:00 pm GMT) and ISM non-manufacturing PMIs (April 4, 2:00 pm GMT) as well as the ADP report (April 4, 12:15 pm GMT), Challenger job cuts (April 5, 11:30 am GMT) and initial jobless claims (April 5, 12:30 pm GMT) all due over the next couple of days.

Market players are only expecting to see an additional 190,000 jobs created in March on top of February’s 313,000 increase. However, the unemployment rate is also expected to dip from 4.1% to 4.0% for the month, while average earnings are seen to improve from 0.1% to 0.3%.

Think Uncle Sam will deliver job gains for another month? Or will the labour market take a chill pill after posting stronger-than-expected numbers for the past two months?

Last Week’s Price Review

The Greenback got edged out by the Kiwi but the Greenback, in turn, was able to edge out a win against the Loonie while the Loonie barely won out against the Kiwi.

And that, in effect, resulted in no clear champion. Instead, we got a triumvirate with the Greenback, the Kiwi, and the Loonie as the top-performing currencies of the past week. Having said that, the Greenback’s price action was more uniform compared to the Kiwi and the Loonie.

Overlay of USD Pairs: 1-Hour Forex Chart
Overlay of USD Pairs: 1-Hour Forex Chart

And looking at the overlay above, we can see that the Greenback captured the bulk of its gains on Tuesday and Wednesday. So, what happened back then?

Well, there weren’t really any direct catalysts for the Greenback’s broad-based rise on Tuesday, so market analysts were quick to attribute the Greenback’s rise to month-end / quarter-end flows, as well as easing fears of a potential trade war between the U.S. and China.

The Greenback’s rise was then very likely sustained on Wednesday after reports made the rounds that North Korean Boss-Man Kim Jong Un met China’s Boss-Man Xi Jinping, which likely eased political tension between North Korea and the U.S. since Kim is looking to talk with Trump on the possible denuclearization of North Korea. And China, for its part, can use North Korea as a chess piece in talks to avert a potential trade war between the U.S. and China.

Another likely catalyst that sustained the Greenback’s rise was the final estimate for Q4 U.S. GDP, which was revised higher from +2.5% quarter-on-quarter annualized to +2.9%, a faster rate of growth compared to the expected revision to +2.7%.

Year-on-year, GDP grew by 2.6%, which is the fastest annual growth rate in 10 quarters and marks the sixth consecutive quarter of ever faster annual growth to boot.

After that, however, the Greenback’s rally began to run out of steam. There was no clear reason why, though, and market analysts only stated the obvious when they pointed out that the Greenback’s bullish run stalled.

In any case, things would hopefully remain interesting for the Greenback since we’ve got a bunch of top-tier reports coming up in the next trading week, including another NFP report.