Bullish Sentiment for Dollar - US Economic Events Surprises

Economic Events Outlook, Oct 4 – Dollar Soars as Economic Events Surprise

Posted Thursday, October 4, 2018 by
Arslan Butt • 2 min read

Good morning, traders.

The US dollar index continues to trade bullish at $95.61 after the Institute for Supply Management’s (ISM) non-manufacturing activity index jumped 3.1 points to 61.6 last month, the highest reading since August 1997. Moreover, the ADP employment report also showed private payrolls surged by 230K jobs in September, the largest gain since February.We don’t have any major event for today, but investors are likely to trade the stronger dollar sentiment. It’s gonna be a fine day to trade the technicals.

 

Watchlist – Top Economic Events Today

GBP – Housing Equity Withdrawal q/q
At 8:30 (GMT), the Bank of England will release the housing equity withdrawals which show a change in the total value of new home-secured loans that are not used for home purchases or improvements.

Economists are expecting the positive release of -6.5B vs. -6.7B previously. Fellas, this release usually goes with a muted reaction. Since there’s no major even expected for today, this can provide investors a reason to trade the market.

USD – Challenger Job Cuts y/y
At 12:30 (GMT), Challenger, Gray & Christmas, Inc. will be releasing the change in the number of job cuts announced by employers. In September, the figure was very disappointing at 13.7%. Considering the ADP data, we can expect a drop in this figure and a smaller figure usually underpins the dollar.

USD – Unemployment Claims
The Department of Labor will release the data at 12:30 (GMT) with a neutral forecast of 214K vs. 214K last week. For new members, it shows the number of individuals who filed for unemployment insurance for the first time during the past week.

How Does it Impact?

If there are more people who filed jobless claims then the economy may not be working well and vice versa. Therefore, we shouldn’t invest in their stock markets or currency. Drop in demand diminishes the value of the currency. Keeping the same logic in mind, we can either short or buy the currencies.

CAD – Ivey PMI
It’s a survey of about 175 purchasing managers, selected geographically and by sector of activity to match the economy as a whole, which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

The economic event will be followed at 14:00 (GMT). The Purchasing Managers’ Index is expected to rise to 62.3 from 61.9 today. It’s a medium impact economic event and may drive some volatility for the Canadian pairs.

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About the author

Arslan Butt is our Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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