The US dollar continued to strengthen on Thursday against risky assets and especially rose in pair with the European currency. Good data on labor productivity and production orders helped the US dollar to regain its position by the end of the week.
According to the report by the US Department of Labor, due to the labor efficiency of American workers, non-agricultural labor productivity in the first quarter of this year increased by 3.6% compared with the previous quarter. Compared to the same period of the previous year, productivity increased by 2.4%.
However, there are some minor problems regarding the growth of unit labor costs. The report indicates that in the 1st quarter, expenses decreased by 0.9% compared with the previous quarter. Compared with the same period of the previous year, unit costs increased by 0.1%.
Orders for manufacturing goods in the US also rose in March and were much better than economists' forecasts.
According to the US Department of Commerce, orders for manufactured goods rose by 1.9% to $508.19 billion. Economists had expected orders to grow in March by 1.5%. Excluding transportation, production orders rose by 0.8% and factory orders excluding defense increased from 1.7%.
Weekly data on the labor market did not cause a special market reaction. According to a report by the US Department of Labor, the number of initial claims for unemployment benefits for the week from April 21 to April 27 was 230,000, while economists had expected the number of new claims to be 215,000. The data is similar to last week, indicating a stable state of the labor market. The average moving applications for four weeks rose to 212,500. The number of secondary applications for the week from April 14 to April 20 increased by 17,000 and amounted to 1,671,000.
Today, all attention will be focused on the US Department of Labor report on the number of people employed in the non-agricultural sector, which could lead to a serious surge in volatility if the data seriously diverge from the expectations of economists. It is predicted that the number of people employed in April of this year will increase by 181,000 after rising by 196,000 in March. The overall unemployment rate should remain around 3.8%.
As for the technical picture of the EURUSD pair, the downward potential will be limited by the support level of 1.1150, the breakthrough of which will return the trading instrument to the lows of April 25, which will completely eliminate the upward correction in risky assets and return to the market large buyers of the US dollar that can easily push the support of 1.1110.
The material has been provided by InstaForex Company - www.instaforex.com