USD – Divergent Data, Divergent Views

The USD gained on Friday and this came on the back of a better than anticipated Non Farm Employment Change number. As much as the jobless figure typically runs the show on the first Friday of every month, the USD did find impetus from outside sources. While Wall Street continued its winning streak and the bond markets struggled, the USD showed gains against most major currencies. However it is clear that the USD is still trading at the weaker side of its range and it will take more than a few good days for the greenback to signal that a reversal is truly underway. While it is possible that the FOMC move earlier in the week has now been fully digested by investors it is the long term policy of the Federal Reserve and Treasury that sill have traders questioning the strength of the USD. The election result also earlier in the week does offer a divergent avenue and give credence to those who believe that the debate on spending and austerity will create constant background music in Washington.

This will be a relatively quiet week for data from the States. There is a holiday on Thursday which will affect volume before and after the Veteran’s Day observances. As much as the Non Farm Change Employment number posted a gain, its outcome still leaves much to be desired and in order to change the Unemployment Rate in the U.S. the States will have to add many more jobs than the outcome of plus 151k. Also the Pending Homes Sales data came in far below expectations and this may eventually be something that worries investors again. The U.S. will not be releasing any major data today and it is likely that investors will continue to listen to the speeches coming from Fed officials and the manner in which it is perceived that a weaker USD is not being looked upon unfriendly by certain officials. The USD has been volatile under a wake of many tides. In its midst the bond market has given way to Wall Street as investors look for places to make trading profits. However, the U.S. economy remains on tenuous ground and many questions are certain to be sounded in the coming weeks.

Written by