On the last day of the final trading week of 2018, the U.S. dollar lost ground against major currencies around the world, reversing the unexpected rally that helped the greenback to hit 18-month peaks. This is because investors braced for more volatility in the equity market. During the week, the forex market witnessed a risk-averse takeaway as the Swiss franc gained and the Australian dollar lagged behind.
Currencies considered as more traditional havens such as the Japanese yen and Swiss franc continued to against the U.S. dollar. The Australian dollar recovered from its slump gained some ground against the greenback. The Australian dollar is by far the most risk-sensitive currencies. It is highly sensitive to commodity prices and global growth. Other currencies such as the British pound and the euro also benefited.
The partial shutdown of the U.S. government is expected to keep the investors on their toes. Meanwhile, President Donald Trump’s tweet said that he is planning to completely shut down the Southern border if congressional Democrats do not provide funds for the construction of the wall.
The key data scheduled to be released in the upcoming lean trading week are the nonfarm payrolls and unemployment rate. Here is an outlook on some of the important releases for the first week of 2019:
#1: ISM Manufacturing PMI (01/03/2018 Thursday 15:00 GMT)
In the U.S., the Manufacturing PMI announced by the Institute for Supply Management following a survey rose to the 59.3 level in November from the 57.7 level in the previous month. The reading for November beat analysts’ expectations that the index will hit the 57.6 level. Production, new orders, and employment increased faster. Comments from the panel reflected continued expansion of business strength. Forecast for December 2018: 58.2
#2: Canada Employment Change and Unemployment Rate (01/04/2018 Friday 13:30 GMT)
Canada added 94,100 jobs in November, after hiring 11,200 workers in the prior month. The job additions data came in well above analysts’ expectations of 11,000. This is the biggest job addition data on record. Both full-time and part-time jobs registered increases in November. Employment rose in six provinces and more people were hired in professional, technical services, and scientific areas; social assistance and health care; construction; building, business, and other support services; warehousing and transportation; and agriculture. In the meanwhile, fewer workers were hired in sectors such as culture, information, and recreation. While the number of private sector employees was more in November, the number of people employed in the public was little changed. The number of self-employed people also remained unchanged.
#3: U.S. Average Hourly Earnings (01/05/2018 Friday 13:30 GMT)
In the U.S., the all-employees average hourly earnings on private nonfarm payrolls increased by 0.2 percent on a month-over-month basis in November after the reading for the previous month was revised downward an increase of 0.1 percent. However, the reading for the month came in below analysts’ expectations for a 0.3 percent increase. On a year-on-year basis, the average hourly earnings rose by 3.1 percent, the same as in the previous month. The annual increase was the quickest since April 2009. Forecast for December 2018: an increase of 0.3 percent is expected
#4: U.S. Non-Farm Employment Change (01/05/2018 Friday 13:30 GMT)
In the U.S., the nonfarm payrolls rose by 155,000 in November after the reading for the previous month was revised downward to an increase of 237,000. The reading for the month came in well below analysts’ expectations of 200,000 job additions. More workers were hired in the health care, manufacturing, and warehousing and transportation sectors. Forecast for December 2018: 181,000 job additions expected
#5: U.S. Unemployment Rate (01/05/2018 Friday 13:30 GMT)
In the U.S., the unemployment rate remained unchanged at the 49-year low level of 3.7 percent in the month of November. The reading for the month was in line with analysts’ expectations. The number of unemployed people dropped by 100,000 to 5.98 million and employment rose by 233,000 to 156.80 million. Forecast for December 2018: 3.7 percent
#6: U.S. Fed Chair Jerome Powell Speaks (01/05/2018 Friday 15:15 GMT)
Jerome Powell, Fed Chair, is scheduled to partake in the panel discussion “Federal Reserve chairs: Joint Interview” in Atlanta at the annual meeting of the American Economic Association. The markets often turn volatile during his speeches. This is because traders make an attempt to understand the direction of interest rates in the future.