USD – On The Fence And Waiting

The USD powered higher against the EUR and GBP on Thursday. Continuing its strong trend, the USD moved to four year high water marks against the EUR. Even as data from the U.S. yesterday proved rather lackluster, the markets appeared to have been positioning themselves for today. Weekly Unemployment Claims were slightly worse than anticipated and the ADP Non Farm numbers also proved disappointing. Also producing a negative outcome were the Factory Orders which turned in a gain of 1.2% compared to the estimate of 1.7%. The government jobless publication today is forecasted to show a significant amount of jobs added with a figure of 529K the forecast. Investors who have been singing the praises of a sustainable recovery will hold their breath as the Non Farm Employment Change results come across the wires and the number will affect trading.

The USD turned in another positive day and its results must be closely examined considering that Wall Street turned in gains too. While the major equity indexes did not climb in a huge amount, it is clear that investors are in essence sitting on the fence and waiting for today’s employment numbers. The stock market has been pummeled for over a month and there are certainly investors who believe that some type of bottom has been reached and that it may be time to fish for bargains. However, there are no doubt legions of investors who also have a less than bright outlook for the U.S. economy and its international counterparts. It will take more than one extraordinary jobs report to really improve the large amount of unemployment that currently exists in the U.S. and is putting a cramp in consumer spending and into the housing sector. The Sovereign Debt issues from Europe remain a large piece of the puzzle as its implications are still being argued. Risk sentiment will be tested for all to see today in the equity markets and the USD will also continue to be traded within a complex web.

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