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Upbeat NFP to solidify USD-strengthening - RBS

FXStreet (Bali) - According to RBS FX Strategists, Friday's upbeat NFP should solidify the USD-strengthening.

Key Quotes

"The outperformance in US labour data in September should solidify the USD-strengthening trend after some recent data misses inspired concern about whether US growth momentum is slowing. Still, it’s worth noting that the September labour figures were not much stronger than the prevailing trend."

"We think larger factors are also at play behind the USD rally – i.e. its status as global funder is eroding, and today’s payrolls leaves the coast clear for USD gains to resume after a brief respite this week."

"The data calendar is light, headlined by the FOMC minutes from the September meeting. Following that meeting, several FOMC speakers (Dudley, Evans, and Lockhart, all doves) voiced concern about the recent strength of the USD. It seems likely that this was discussed at the September FOMC meeting, and the minutes may reference that some members expressed concern about the strength of the USD."

"Still, the FOMC minutes should broadly reflect what we learned from the new September forecasts – that most members became more optimistic on achieving the Fed’s mandates faster. The Fed Funds rate (FFR) projection “dot points” were revised higher likely as a result. Still, upward revisions in FFR forecasts were not enough to merit any changes in language in the September FOMC statement.

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