Although the recession is still strong, the surprising payrolls figure hinted that the worst is behind us, even in the job market. With rising commodity prices and improving consumer sentiment, inflation might be around the corner. Will Bernanke change a direction? Last week’s Non-Farm Payrolls were much better than expected – they fell by 345,000 jobs, much better than expectations that were above 500K, and the best result in many months. It seems that the big layoffs are already behind us. Don’t get me wrong, the American job market isn’t in a hiring mode. Jobs still fell, and the unemployment rate rose to 9.4%. The cliff that the economy fell off turned into a grassy hill, with hope ahead. In February I wrote that inflation is becoming irrelevant in the forex market. With oil above $70, things look different now. Oil prices have doubled since hitting the bottom. Despite being half the price at the peak, $147 a barrel, the price hike in oil impacts prices everywhere. Together with the price of oil, other commodity prices will rise. This still isn’t seen in CPI and PPI figures, but the commodity prices don’t dwell only in the stock exchange – they affect real people as well. Another interesting thing to watch is consumer sentiment. American consumers show more optimism lately. This can be seen in the highly regarded report by the University of Michigan, which is getting close to 70 points. A higher consumer sentiment means more consumption, which puts pressure on prices. When will Bernanke raise the interest rate? A maximum rate of 0.25%, practically 0%, cannot last forever. While official statements by the Federal Reserve say that this low rate will stay for a long time, it won’t last forever. Maybe I’m writing this too early, but I do believe that lifting the interest rate will happen sooner than later. It won’t happen in Europe, which suffers from deflation, and not in Britain, Japan or Switzerland. Out of all the major currencies, the dollar seems the first currency to have its interest rate bounce from the bottom. When will it happen? Like this story? Vote for it on ForexFactory. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Opinions share Read Next Forex Daily Outlook – June 12th 2009 Yohay Elam 13 years Although the recession is still strong, the surprising payrolls figure hinted that the worst is behind us, even in the job market. With rising commodity prices and improving consumer sentiment, inflation might be around the corner. Will Bernanke change a direction? Last week's Non-Farm Payrolls were much better than expected - they fell by 345,000 jobs, much better than expectations that were above 500K, and the best result in many months. It seems that the big layoffs are already behind us. Don't get me wrong, the American job market isn't in a hiring mode. Jobs still fell, and the unemployment… Top Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.