Will NFPs Generate the Same Dollar Volatility as UK Elections Did the Pound?

Talking Points:

• Compared to the many possible outcomes for the UK election, the US NFPs data carries clearer scenarios

• There are three key indicators in the labor data to watch: NFPs, unemployment rate and wage rate

• Volatility will likely follow the meet or beat of payrolls but trend will come through key rates

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A shot of volatility seems to be what is needed for an indecisive Dollar. Can Friday's NFPs provide it? Having pulled back from more than a nine-month run to a decade high this past month, the Dow Jones FXCM Dollar Index (ticker = USDollar) has sense shifted to an uncomfortable consolidation. The technical scenario is looking very much like the fundamental backdrop. Where the months of strength were derived from a Fed readying for a tightening policy position, there has since been a period of cooler data and tempered rate expectations. Will the rate forecast lean towards the September time frame Fed member Dennis Lockhart suggested was 'reasonable' yesterday or will the January 2016 outlook priced into Fed Funds futures look more realistic? What pairings are best positioned for a 'bullish' or 'bearish' Dollar view? We discuss that in today's Trading Video.

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