Dollar Pauses For Now
The US Dollar is trading with a softer tone through the early European session on Tuesday, on the back of the rally seen last week. A stronger-than-forecast set of US labour market readings has seen expectations for a deeper .5% cut in November put to bed, for now at least. The NFP print was seen spiking higher to 254k from 159k prior, above the 147k the market was looking for. The unemployment rate was seen improving to 4.1% from 4.2% prior and expected while wage rose at 0.4%, above the expected 0.3% reading forecast on Wall Street. The greenback was seen firmly higher into the close on Friday with traders now forecasting a .25% cut along with a roughly 10% chance of a hold.
FOMC Minutes & CPI Due
Looking ahead this week, focus will now be on the FOMC minutes due tomorrow followed by CPI on Thursday. Traders will be carefully scrutinising the minutes for clues as to how the Fed is likely to act next month. For CPI, given the shift in expectations on the back of the NFP, any upside surprise in Thursday’s data should see the current USD rally find further support. However, if we see a downside surprise, this could reignite expectations for a deeper cut in November, leading USD lower near-term. Finally, on Friday traders will look to further inflation data with the latest PPI readings also due.
Technical Views
DXY
The rally in the DXY has stalled for now into a test of the 102.46 level and the underside of the broken bull trend line. This is a key pivot for the market which, if broken opens the way for a move up to 102.05 next. To the downside, 100.93 remains the key support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.