The US Dollar Index (DXY) price was trading up over 42 pips as the US dollar rallied against its peers on the upbeat data released from the US docket. The US dollar was boosted by data releases from the country’s docket, including the initial jobless claims data, which beat analysts' expectations.
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The US new jobless claims data came in at 230,000 claims, beating analysts estimates of 239,000 new jobs. The country also recorded a decline in continuing claims, which fell to 1,702K from 1,716K. However, most investors are focused on today and tomorrow's Jackson Hole Symposium.
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Earlier comments from former Fed member James Bullard confirmed that reacceleration could put upward pressure on inflation, thus making it impossible for the Fed to start cutting rates anytime soon. The US dollar surged higher on Bullard’s comments, kicking off today’s rally.
The weak US durable goods orders data had minimal impact on the dollar as investors were focused on the upbeat initial jobless claims data. On a positive note, the Chicago Fed National Activity Index jumped from -0.32 to 0.12 and is back in positive territory.
Economists at BBH are bullish on the dollar and said: “As bad as things may get in the US, the rest of the world looks even worse. Dollar bears should ask whether the Euro or Sterling looks that much better than the Dollar. China, too, is looking quite weak, and in that regard, EM will likely remain under pressure. Not only is China struggling to grow, but because of the knock-on effects on EM growth, policymakers are likely to cut rates sooner rather than later. Hungary, Chile, and Brazil have already cut rates, and Poland is up next. Lower EM rates combined with a hawkish Fed, higher US rates, and a stronger Dollar should continue to put downward pressure on EM FX.”
Meanwhile, the Jackson Hole Symposium was underway, and investors eagerly awaited the first speeches from leading central bankers from the world’s most developed countries. However, investors should watch out for the Fed Chair Jerome Powell’s speech scheduled for Friday morning US time.
The US Dollar Index (DXY) price chart.
The US Dollar Index (DXY) stock price was trading up 42.7 pips (0.41%) on the upbeat US data.
YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.