Jobs data is always important, but the March employment report coming next week could be crucial to setting the course of the dollar for months to come.
The dollar's recent weakness has been directly tied to the market's view that the Fed will take a longer time to raise interest rates, and that perhaps September is a more likely launching point than June, as some investors had expected. That view took hold following last week's Fed meeting, when the central bank changed its economic forecasts and interest rate projections.
"The employment number is massive, I think really in so much as that it will either suggest June is still possible if the data is strong. If we get an as expected, 250,000 number, June is still possible," said Alan Ruskin, head of G-10 currency foreign exchange strategy at Deutsche Bank. "If we get sub-250,000 [jobs created for March], it will dent an expectation of a June tightening and reinforce a view that we won't get tightening until later in the year."