25 Jul 2014
USD on a firmer footing - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observes the buy sentiment around the USD.
Key Quotes
"The US dollar has remained firmer in the Asian trading session with the dollar index rising towards the 81.00-level which has provided strong resistance since last autumn. The US dollar derived support yesterday from the release of the stronger than expected initial jobless claims report which revealed further evidence that the US labour market continues to strengthen."
"The Fed has already signalled that if the labour market continues to strengthen more than expected it could prompt sooner and more rapid rate hikes. The report revealed that initial jobless claims dropped decisively below the 300k reaching their lowest level since mid-February 2006."
"Non-farm payroll employment increased by 315k in February 2006 and by an average of 291k/month in Q1 2006. At face value the report signals that there are upside risks to consensus expectations that non-farm payroll employment growth will ease to 225k in July from 288k in June."
"However, a note of caution is warranted as initial claims tend to be more volatile at this time of year due to the annual auto shutdowns which can provide misleading signals, although the underlying trend remains one of improvement in the labour market. Upward momentum for the US dollar and US yields was partially dampened yesterday by the release of the weaker than expected new homes sales report for June which provided further evidence that the housing market remains weak in the near-term although leading indicators are pointing towards a gradual pick up in the 2H 2014."
Key Quotes
"The US dollar has remained firmer in the Asian trading session with the dollar index rising towards the 81.00-level which has provided strong resistance since last autumn. The US dollar derived support yesterday from the release of the stronger than expected initial jobless claims report which revealed further evidence that the US labour market continues to strengthen."
"The Fed has already signalled that if the labour market continues to strengthen more than expected it could prompt sooner and more rapid rate hikes. The report revealed that initial jobless claims dropped decisively below the 300k reaching their lowest level since mid-February 2006."
"Non-farm payroll employment increased by 315k in February 2006 and by an average of 291k/month in Q1 2006. At face value the report signals that there are upside risks to consensus expectations that non-farm payroll employment growth will ease to 225k in July from 288k in June."
"However, a note of caution is warranted as initial claims tend to be more volatile at this time of year due to the annual auto shutdowns which can provide misleading signals, although the underlying trend remains one of improvement in the labour market. Upward momentum for the US dollar and US yields was partially dampened yesterday by the release of the weaker than expected new homes sales report for June which provided further evidence that the housing market remains weak in the near-term although leading indicators are pointing towards a gradual pick up in the 2H 2014."