On Friday, U.S labor department data came out to be better than expected, according to Labor department 235000 nonfarm payrolls were added in month of February, way ahead of 197000 expected. Jobless rate also declined to 4.7% from 4.8% in January, on the other hand private sector hourly wage rate also increased by 0.2% on monthly basis versus the 0.3% expected.
Despite of sharp increase in nonfarm payrolls U.S dollar headed down, as it is widely believed that interest rate increase is going to happen in upcoming meeting, and Federal fund futures shows that the odds of interest rate in March is 93% as March increase was largely priced in by the investors, and investors are already looking ahead to the pace of further increases.
Australian and New Zealand dollar trading in higher range in today’s Asian session, although any further gains may be capped by declining commodity prices. The main event for market in this week would be U.S Federal Reserve meeting.
U.S is expected to release its overview of major budget to congress on 13th and 14th Match, there are uncertainties about the size and scope of tax cuts and whether a border adjusted tax is included. There is risk of delay in fiscal plans and shorting of lofty expectations.
Australian dollar expected to be supported by the strong improvement in employment which will released on Thursday, but rally would be limited because of the increase in iron ore prices.
New Zealand dollar is waiting for fourth quarter growth data expected to be release on Thursday, UBS lowered its GDP forecast for fourth quarter after unexpected weak decline in manufacturing data. Central bank of New Zealand now expects 0.5% growth rise on quarter, earlier it projected 0.8% increase. This would mean an annual growth rate would be 3% instead of 3.8%.