Today's labour market report is likely to disappoint the members of the FOMC once again "since the number of new jobs created in the US will likely be too small to lead to a significant reduction in the unemployment rate", Ulrich Leuchtmann, analyst at Commerzbank said. "Following the distortions on the US labour market caused by the recession of 2008/09 a large share of the unemployment is likely to be structural. That makes it very questionable whether QE3 would actually help the FOMC reach its intended goal".
"Measures of quantitative easing are only positive for a currency if they are considered to be a promising game changer which will successfully solve the crisis in question – so QE3 is likely to put pressure on the dollar", Commerzbank analyst added. "On forward-looking FX markets this means that any event which increases the likelihood of future QE3 measures (such as a bad labour market report today) will put pressure on the dollar".