Today’s Economic Data Brief: The USD Has Fallen Out Of Bed!

It has not been a pretty session for the U.S. dollar. Currently, the USD is showing weakness across the Majors, due to the news out of Europe during the overnight. Earlier, my colleague Skeridian discussed the pressure on the greenback amid comments from ECB head Draghi.

A Look At The Dollar Index

The U.S. dollar futures index is a good barometer of the relative strength of the buck. Right now, it does not look good.

USD Futures Index-Daily Chart

I am not real big on trading the USD futures index, mostly because the forex offers many more opportunities. That aside, the USD futures can be very useful in identifying possible upcoming trends in pricing.

The FOMC meeting on the 20th of this month may pump some life into the USD. There is a growing belief that the FED will hold rates steady for the near term. Rest assured that they are looking at the same charts that we are. A rate hike is the likely scenario, and a justifiable move to strengthen the dollar.

Today’s Metrics

A few U.S. employment metrics came out earlier this morning. None are as pivotal as the ECB announcements, but are worth a look:

Event                                                       Previous             Projected       Actual

Continuing Jobless Claims (Aug)               1.945M             1.950M            1.940M

Initial Jobless Claims (Sept)                       236K                   241K                298K

Nonfarm Productivity (Q2)                          0.9%                    1.3%                1.5%

Unit Labor Costs (Q2)                                 0.6%                    0.3%                0.2%

The big takeaway from looking at the employment data is a moderate change in jobless claims and an increase in productivity. All in all, the market absorbed this data with little fanfare.

Moving forward, we will have a close eye on how the USD responds to rhetoric out of FED governors. It goes without saying, but this is a crucial period for the long-term stability of the greenback.