Dollar Remains Firm but Data Could Change Things
There wasn’t much consistency in the performance of the dollar and while USD/JPY failed to end the day above 113, it also did not experience significant losses. With that in mind, the greenback ended the day lower against the euro, Swiss Franc and Canadian dollars. The dollar’s quiet strength suggests that investors are optimistic and its hard not to be with stocks hitting fresh record highs Monday and Tuesday. It will be interesting to see if the greenback can maintain its firm tone after Wednesday U.S. economic reports. The most important event risk this week is non-farm payrolls and tomorrow’s ADP and non-manufacturing ISM numbers will go a long way in shaping expectations for Friday’s release. Investors are bracing for a soft jobs report due to the hurricanes but are also hoping that tomorrow’s releases may not be so weak after Monday’s strong manufacturing ISM report. ADP is likely to see softer private payrolls growth – the only question is by how much. Economists are looking for private payrolls to rise by only 140K versus 237K the previous month but if ADP comes in below 100K we could see a sharp decline in the dollar. Of the 2 reports, non-manufacturing ISM is generally more important because the employment component of the report has a stronger correlation with non-farm payrolls so we’ll be watching that closely as it could erase or exacerbate the market’s reaction to NFP.
The dollar was slightly weaker against the euro on Tuesday as investors squared positions after a three week greenback rally, and before three days of heavy data culminating in Friday’s employment report for September.
Stronger U.S. data along with the prospect of U.S. tax cuts and the likelihood of a further interest rate hike in December have boosted the U.S. currency in recent weeks.
The dollar was slightly weaker against the euro on Tuesday as investors squared positions after a three week greenback rally, and before three days of heavy data culminating in Friday’s employment report for September.
Stronger U.S. data along with the prospect of U.S. tax cuts and the likelihood of a further interest rate hike in December have boosted the U.S. currency in recent weeks.
Comment:
Non-Manufacturing ISM® Report On Business®. The NMI® registered 59.8 percent. This is the highest reading since August 2005
Comment:
Initial jobless claims 260K vs 265K expected
ADP expected a drop due to Irma and Harvey