Attention is back to Powell this week

USD Quiet As Fed Chair Powell Speaks At ECB Forum

Posted Thursday, November 12, 2020 by
Shain Vernier • 1 min read

It’s been a quiet day for the Greenback as Fed Chairman Jerome Powell has addressed the ECB Forum. Conversely, stocks are decisively bearish. With only a few hours left in the trading day, the DJIA DOW (-310) S&P 500 SPX (-35), and NASDAQ (-50) are all in the red. The likely underpinnings of today’s action are surging COVID-19 cases.

However, this morning’s weekly U.S. Jobless Claims numbers came in positive. Here’s a quick look at the highlights:

Event                                                                   Actual             Projected          Previous

Continuing Jobless Claims (Oct. 30)               6.786M               6.900M               7.222M

Initial Jobless Claims (Nov. 6)                            709K                    735K                    757K

All in all, this is a positive collection of metrics. Jobless Claims came in well down from the previous release and beneath expectations. While this year’s holiday season is going to be greatly impacted by COVID-19 lockdowns and quarantines, unemployment is likely to fall well below the 7.6% Fed year-end target.

USD Quiet As Fed Chair Speaks At ECB

A bit earlier, Fed Chairman Jerome Powell gave a speech at the ECB forum. Basically, Powell said the economic recovery is stronger than expected and that a COVID-19 vaccine is good news. Of course, Powell also said that tremendous uncertainty surrounding the virus remains. Subsequently, the December USD Index has entered consolidation.

December USD Index Futures (DX), Daily Chart

Overview: Following the Fed chair’s ECB speech, there isn’t much going on in the USD Index. Rates are in heavy rotation near the 38% Current Wave Retracement (92.965). If we see a close beneath this level, a retest of the Spike Low (92.120) is probable in coming sessions. Should this market settle above 92.965, a late-week rally may set up as we roll into mid-November trade.

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