US economic data continued to post positive surprises again this week, with labor market, housing, and manufacturing coming in better than expected. From the most recent FOMC Minutes we know that the conditions for more easing would be a fall in prices below the Fed’s target. While the CPI data is not likely to have as big an impact compared to the latest headlines out of Greece, it will hold clues to the direction the FOMC will take next when it comes to stimulus, and therefore will be important to where the US Dollar index heads next.
Euro is gaining the levels on the back of Ben Barnake’s speech who again expressed concerns over slow recovery of US. The single currency is has come above 1.3000 levels and approaching the opening price of the day. The pair is still down 0.20%…
The US dollar spent much of the day today range trading against most of its main currency rivals, including the euro, British pound and Swiss franc. Traders were hesitant to bet against the greenback ahead of possible news on a Greek debt swap deal. …
Today’s non-farm payroll data came in very strong with an uptick in manufacturing hiring adding to robust gains in the services industries. This has strong implications for risk assets, and the prospects for the US economy as well as for global growth. The reaction was a strong gain in US equities, and very good performance by commodity currencies against the European higher yielders. The USD had a mixed reaction, declining against the AUD, NZD, and CAD, but strengthening against the EUR and GBP, and the JPY.
Key to end this week will be Friday’s non-farm payroll data. December’s 200K gain was a big boost to the idea that momentum in the US economy is maintaining, if not building on itself, even if temporarily. A better than expected reading can give risk sentiment a pop, benefiting “higher yielding” currencies at the expense of the US dollar and Japanese Yen. A disappointing figure would help risk aversion as any signs of slowdown in the US would increase concerns about the drag on the global economy.