NFP Preview: Is the US Dollar Poised for a Bounce Back?

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Matt Weller
By :  ,  Head of Market Research

NFP Key Points

  • NFP report expectations: +198K jobs, +0.3% m/m earnings, unemployment at 3.7%
  • Leading indicators point toward an almost dead-on expectations reading in this month’s NFP report, with headline job growth in the 175K-225K range.
  • After slipping for the past three weeks, the US Dollar Index is testing key previous support at the 103.00 level, potentially setting the stage for a bounce on solid jobs data.

When is the February NFP Report?

The February NFP report will be released on Friday, March 8, at 8:30 ET.

NFP Report Expectations

Traders and economists expect the NFP report to show that the US created 198K net new jobs, with average hourly earnings rising 0.3% m/m (4.4% y/y) and the U3 unemployment rate ticking holding steady at 3.7%.

NFP Overview

The US economy got off to a strong start to 2024, and this week’s NFP report will show whether that momentum carried over into February.


Source: StoneX

In another busy week for the Fed Chairman, Jerome Powell reiterated to Congress that he still expects to cut interest rates this year as long as the economic data continues to cooperate. After stellar job growth of 350K+ net new positions last month though, Powell and Company probably want to see the strength in the labor market moderate over the next couple months before starting to reduce rates, rather than risk inflation picking up again.

NFP Forecast

As regular readers know, we focus on four historically reliable leading indicators to help handicap each month’s NFP report:

  • The ISM Services PMI Employment component ticked down to 48.0 from 50.5 last month.
  • The ISM Manufacturing PMI Employment component ticked down to 45.9 from 47.1 last month.
  • The ADP Employment report showed 140K net new jobs, an incremental increase from last month’s upwardly-revised 111K reading.
  • Finally, the 4-week moving average of initial unemployment claims rose to 212K, up from 208K last month but still near historically low levels.

Weighing the data and our internal models, the leading indicators point to an almost dead-on expectations reading in this month’s NFP report, with headline job growth potentially coming in somewhere in the 175-225K range, albeit with a bigger band of uncertainty than usual given the current global backdrop.

Regardless, the month-to-month fluctuations in this report are notoriously difficult to predict, so we wouldn’t put too much stock into any forecasts (including ours). As always, the other aspects of the release, prominently including the closely-watched average hourly earnings figure which came in at 0.6% m/m in the most recent NFP report.

Potential NFP Market Reaction


Wages < 0.2% m/m

Wages 0.2-0.4% m/m

Wages > 0.4% m/m

< 160K jobs

Bearish USD

Neutral USD

Slightly Bullish USD

160-240K jobs

Neutral USD

Slightly Bullish USD

Bullish USD

> 240K jobs

Slightly Bullish USD

Bullish USD

Strongly Bullish USD

As we outline below, the US dollar has generally been trending lower for the past three weeks as traders price in a June rate cut from the Fed as more likely than not. That leaves the risks potentially tilted to the upside for the greenback if the NFP report comes in better than expected.

Market Outlook EUR/USD

US Dollar Technical Analysis – DXY Daily Chart


Source: TradingView, StoneX

Looking at the broad US Dollar Index (DXY), the world’s reserve currency has been trending lower since testing 105.00 in mid-February. In fact, it’s now approaching the bottom of its 8-week range in the 103.00 zone, a level that has consistently provided both support and resistance dating back to Q3 of last year.

With the US Dollar Index testing a key support level and a June rate hike most of the way discounted already, the odds may be skewed in favor of a bounce back in the greenback if the jobs report can meet or exceed expectations. That said, if we see a soft jobs report that leads to a break of 103.00 support, a deeper retracement toward 102.00 may be next.

-- Written by Matt Weller, Global Head of Research

Follow Matt on Twitter: @MWellerFX

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