Do you remember what the main message was that we received from the FOMC minutes on Wednesday? 

The main message that I got from those minutes was “let´s wait and see”. There was a feeling of uncertainty, albeit in a positive economic environment, and there was no consensus between FED members regarding their short-term monetary policy.

So, they´re going to wait for the economic data in the coming weeks to see if the U.S. economy can support an additional rate hike before the one planned in December or a withdrawal of some monetary stimulus in September.

Well, if the future of the USD depends on the data, we better have a look at this week´s trend.

On Monday, the ISM manufacturing PMI jumped nearly 3 full points following the incredible surge in Chicago PMI the previous Friday. Tick for the USD, or 2 ticks actually since it´s two pieces of data for two different sectors of the U.S. economy.

Factory orders took a dive on Wednesday, which is a minus, although not as strong as the first two fundamental indicators since factory orders tend to be volatile.  

Yesterday, ADP non-farm employment missed the expectation but the number is still at a decent level.

On the other hand, both services and non-manufacturing PMI beat expectations. So, that´s another two ticks/points for the Buck.

Today we have the unemployment rate, the non-farm employment change, and particularly the average hourly earnings, which is a very important indicator since it means direct money in people´s pockets, thus higher spending. 

The market is not quite catching up with the positive data because the FED has to acknowledge it, accept it, and strengthen their hawkish rhetoric.

But as forex traders, we have to anticipate what´s coming next and if the data continues to be like this, I anticipate a turnaround in the Buck. We have to see what today´s numbers bring up, though. If they´re positive, then this might be the beginning of the turnaround.  

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