By the end of Wednesday the USD began to recover some of its lost value against the EUR and GBP. The day will not be remembered as a volatile one, but the greenback did bounce back proving that a one way avenue did not exist. The ADP Non Farm Employment Change data was released and produced a better than expected outcome of 42k compared to the estimate of 38k. The result will not set off music for investors, but some will grasp at anything optimistic within reach. Today the weekly Unemployment Claims will be brought forth and the numbers are expected to almost match last week’s. Yesterday the ISM Non Manufacturing PMI reading was also produced and came in with a mark of 54.3, which was an improvement over the forecast of 53.2.
However, investors focus has been on the jobless statistics and this will remain the case these next two days. Tomorrow the Non Farm Employment Change statistics and the Official Unemployment Rate will be published and all eyes will be on these reports. The jobless situation needs little explaining and until Americans feel that their prospects are secure there is little chance that the economy in the U.S. is going to suddenly revitalize into the beast that it was prior to the recession. Wall Street turned in a better performance on Wednesday, but it gains were unconvincing and traders seem poised for all possibilities. We are approaching the dog days of summer and trading volumes may become quite light. The gains by the USD yesterday indicate that the currencies are moving under the guise of short term sentiment. The prospects for the U.S. economy are still rather sluggish and investors are likely waiting for tangible second quarter results to look at before taking a stance. Until investors return in full force to the markets, traders will have their opportunities to test momentum based on risk sentiment.
Written by bforex.com