DXY Higher on Jobs Data
The US Dollar is ending the week at highs after a firm rally yesterday as traders reacted to stronger than forecast US data. The weekly jobless figure was seen well below forecasts at 218k down from 232k prior, below 233k expected. Alongside this, the final quarterly GDP figure was seen lifting to 3.8% from 3.3% prior and expected. On the back of the data, easing forecasts have softened slightly with pricing for a cut next month falling to around 8% from 95% previously and pricing for an additional cut by year end falling to around 60% from 70% prior.
Hawkish Powell Comments
These readings come on the back of hawkish comments from Fed’s Powell this week. The Fed chair warned that finely balanced risks to the economy mean the bank will have to proceed with caution over any future cuts. Given that labour market weakness has been a key argument for further easing, yesterday’s unexpected drop in jobless claims is an interesting development and traders will now be looking ahead to the upcoming September NFP in a week’s time to see if there has been any improvement in the broader jobs landscape. If seen, this could fuel a furtehr softening of near-term easing expectations allowing USD to recover higher near-term.
Technical Views
DXY
The bounce off the 96.63 level has seen the market trading back above the 98.24 level with price now retesting the underside of the broken bull channel. This is a key area for the market, with the 99.15 resistance just above, and a break higher here will turn focus back to the key 100 level next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.