Forex trading

The forex trading market is anxiously awaiting the release of January’s US job data – scheduled to be unveiled today (Friday, February 3) at 13:30GMT.


Most analysts expect that the US economy will report the creation of 150,000 jobs during the period – enough to keep the unemployment rate flat at 8.5 per cent. However, any positive movement could enhance risk sentiment among forex traders; while disappointment could prompt further calls for more support from the Federal Open Market Committee. Indeed both outcomes could have a negative effect on the US dollar.


Mixed views


Forex trading speculators offered mixed reports about the potential impact that the release of jobs data by the US could have on the forex market.


Speaking to the Wall Street Journal, Kengo Suzuki, who works as a forex strategist for Mizuho Securities, based in Tokyo, commented that the US dollar is likely to be sold irrespective of how the data is reported. He believes that weak data only extends calls for the Federal Open Market Committee to extend its easy monetary policy further; while strong data could further the appetite for risk among forex traders – which is likely to prompt further dollar sales.


However, Richard Fisher, who is the president of the Federal Reserve Bank of Dallas, believes that rate forecasts are pure guesses and so projections of keeping rates at ultra-low levels until 2014 should not be given too much thought.


Meanwhile, Masafumi Yamamoto, who works in Tokyo for Barclays Capital as a chief forex strategist, believes that if the jobs data is worse than expected the US dollar may yet fall to match its post war low against the yen - set at Y75.31.


Intervention


At the start of the day, the US dollar stood at Y76.19 with expectations increasing that the Japanese authorities may intervene with yen-selling to keep rates above what is seen as a vital level at Y76.00.


Elsewhere, after the release of US jobs data, it is expected that the attention of the forex trading market will once again move towards the debt crisis in Greece and negotiations to write-off the country’s debt.


There have been repeated suggestions from Greek officials that a deal is imminent – with Olli Rehn, the European Union Economic and Monetary Affairs Commissioner, commenting on Thursday that a deal could still be reached before the week concludes.