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09/08/24
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USD Flat After Volatile Week; CPI Data Next
On Friday, the U.S. dollar was flat and traded close to a one-month high after stronger than expected U.S. jobless claims eased fears of a looming recession in the world’s biggest economy.
The U.S. dollar index, which measures its strength against 6 other major currencies, traded at about 103.007, close to levels seen before the labor market release on Thursday.
On Thursday, data showed that first-time claims for state unemployment benefits dropped 17K to a seasonally adjusted 233K for the week that ended on August 3, the biggest weekly drop in nearly 11 months.
This helped ease fears that the U.S. economy was moving toward a hard landing and that the Federal Reserve was lagging with its decision to not cut rates late last month.
Analysts at ING said in a note the unusually big reaction to jobless claims figures yesterday indicated that markets were extremely sensitive to all types of indications on the US macro outlook.
Next week, the focus will turn to the latest consumer prices release, as traders look for more clues about the Fed’s likely future moves.
According to the CME Group’s FedWatch Tool, the odds of the Federal Reserve reducing interest rates by 0.5% at the next policy meeting are currently slightly higher than 50%.
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