US jobs data and Powell’s speech eyed as dollar rally stalls – Forex News Preview



There’s a storm of critical events this week that will shape the US dollar’s trajectory, including a speech by the Fed boss on Wednesday and the latest employment report on Friday. The Fed chief could strike a hawkish tone, while most indications suggest the US labor market is still in good shape. As for the dollar, even though the rally has stalled lately, a trend reversal is probably a story for next year. 

Dollar loses its shine

It’s been a tough couple of months for the US dollar, which has surrendered almost half the gains it recorded this year, as some early signs that inflation has started to simmer down saw traders unwind bets that the Fed will push interest rates above 5% this cycle. 

While the inflation landscape hasn’t changed so dramatically, investors seem to be placing emphasis on several leading indicators suggesting the US economy is losing steam, betting that this will prevent the Fed from raising rates much further. Gloomy business surveys, high inventory levels, a softening housing market, low consumer morale, and a deeply inverted yield curve are all classic warnings of trouble ahead. 

Nevertheless, this weakness hasn’t been reflected in ‘official’ data yet. Consumption remains solid, the Atlanta Fed GDPNow tracker points to annualized growth of 4% this quarter, and the labor market is still near full employment. This durability means the Fed cannot back down yet, despite mounting evidence that the economy might struggle next year. 

Powell and nonfarm payrolls

This week, the show will get started with a speech from Fed chief Powell at 18:30 GMT Wednesday, where he is likely to highlight his unwavering commitment to getting inflation under control. Markets have been trading as if the inflation war has been won, with yields sliding and stocks rallying lately, which is counter-productive for the Fed as it neutralizes the impact of its rate increases.

Therefore, Powell might take the opportunity to push back and remind investors that the tightening cycle still has some ways to go, stressing that rates will stay elevated for some time. This has been the playbook all year - whenever financial conditions loosen excessively, Powell hits back. 

Turning to the data, Wednesday will bring the second estimate of GDP for Q2 and the ADP jobs report for November. Then on Thursday, personal income and consumption numbers are due out, alongside the core PCE price index and the latest ISM manufacturing index. The week will conclude with the jobs report for November on Friday. 

Nonfarm payrolls are expected at 200k in November, slightly softer than the 261k in October but still a healthy number overall. The unemployment rate is seen unchanged at 3.7%, while wage growth is projected to have cooled a little both in monthly and yearly terms.  

Labor market indicators softened during the month, but not much. Business surveys revealed a marginal increase in workforce numbers while seekers of unemployment benefits increased a touch, albeit not enough to signal any massive disappointment in this data. It will likely take a few more months before the labor market truly feels the heat of higher rates. 

From a technical standpoint, a soft report could propel euro/dollar above the 1.0490 region, opening the door towards 1.0610. On the other hand, another solid dataset might pressure the pair lower, with the first major support barrier being the 1.0230 zone.  

Dollar reversal? 

All told, even though some of the elements that fueled this ferocious dollar rally seem to be losing their kick, for instance with US inflation cooling off, it is still too early to call for a proper trend reversal. 

The argument is simple - other major economies such as the Eurozone and United Kingdom will probably fall into recession long before America does. Business surveys suggest these economies might be in a downturn already, while the US likely needs a few more quarters to get there thanks to its resilience to the energy shock. 

Historically speaking, powerful dollar rallies don’t end while the outlook for global growth is deteriorating, as safe-haven flows keep the reserve currency in demand.  Hence, while this rally seems to be entering its final chapters, the prospect of a reversal remains premature for now, and possibly a story for next year. 

Pinakabagong Balita

Technical Analysis – USDJPY jumps above a downtrend line


Fourth-quarter GDP print to ease sterling problems? - Forex News Preview



Daily Market Comment – Dollar soars, stocks dive after NFP shock; yen skids on BoJ rumours


Technical Analysis – EURUSD maintains bullish trend despite post-NFP crash

Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.

Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.

Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.

Gumagamit kami ng cookies para mabigyan ka ng mahusay na karanasan sa aming website. Magbasa pa o palitan ang iyong cookie settings.

Babala sa Risk: Maaaring malugi ang iyong kapital. Maaaring hindi nababagay sa lahat ang mga produktong naka-leverage. Mangyaring isaalang-alang ang aming Pahayag sa Risk.