vendredi 17 avril 2015
Is the Dollar Breaking Out?
Posted on 05:06 by nice news
The key issue as the market heads into the weekend is whether the US dollar is breaking out of its trading range to the downside. Has the disappointing US economic data and the somewhat better European data finally taken its toll and forcing the dollar bulls to rein their enthusiasm?
Helped by the sixth consecutive advance in oil, the Canadian dollar extended its advance out of the three month trading range. A less dovish central bank had provided the earlier fuel.
Australia's jobs data was sufficiently strong as to encourage market participants to downgrade the odds of a May rate cut. The market still leans that way, but the OIS implies about a 60% chance, rather than near 80% chance earlier in the week. The Aussie has largely been confined to a $0.7600-$0.7950 range since the start of February. It is moving above $0.7800 for the first time in a couple of weeks.
Sterling is trying to establish a foothold above the $1.50 level for the first time since March 18, when in response to the "dovish FOMC" sterling reached $1.5165. The employment data was the catalyst, but it was not particularly strong, which means it may be a better indication of the more generalized pressure on the US dollar longs. After all, the UK election is in three weeks, and how a majority government will be cobbled together remains elusive. The claimant count fell by 20.7k. The market had been looking for a decline of nearly 30k and the February figure was revised to -29.1k from -31.0k. Average weekly earnings, reported with an extra month lag, rose 1.7% (three months year-over-year), down from a revised 1.9% pace in January. Excluding bonuses, however, the pace increased to 1.8% from 1.6%.
The euro is advancing for its fourth day, though remains well below last week's $1.1035 high. After trading nearing $1.0820 yesterday, the euro slid back to a little below $1.0740 in late Asia, but was quick bought back
Helped by the sixth consecutive advance in oil, the Canadian dollar extended its advance out of the three month trading range. A less dovish central bank had provided the earlier fuel.
Australia's jobs data was sufficiently strong as to encourage market participants to downgrade the odds of a May rate cut. The market still leans that way, but the OIS implies about a 60% chance, rather than near 80% chance earlier in the week. The Aussie has largely been confined to a $0.7600-$0.7950 range since the start of February. It is moving above $0.7800 for the first time in a couple of weeks.
Sterling is trying to establish a foothold above the $1.50 level for the first time since March 18, when in response to the "dovish FOMC" sterling reached $1.5165. The employment data was the catalyst, but it was not particularly strong, which means it may be a better indication of the more generalized pressure on the US dollar longs. After all, the UK election is in three weeks, and how a majority government will be cobbled together remains elusive. The claimant count fell by 20.7k. The market had been looking for a decline of nearly 30k and the February figure was revised to -29.1k from -31.0k. Average weekly earnings, reported with an extra month lag, rose 1.7% (three months year-over-year), down from a revised 1.9% pace in January. Excluding bonuses, however, the pace increased to 1.8% from 1.6%.
The euro is advancing for its fourth day, though remains well below last week's $1.1035 high. After trading nearing $1.0820 yesterday, the euro slid back to a little below $1.0740 in late Asia, but was quick bought back
Is the Dollar Breaking Out?
Categories: Is the Dollar Breaking Out?
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