Weak Dollar Awaits Jobs Rescue
Ashraf Laidi | Sep 03, 2021 02:38AM ET
by Adam Button
DXY is posting its fifth consecutive daily decline, the longest string of losses since April. Thursday's release of weekly jobless showed a slight decline as expected, but it was Wednesday's poor ADP employment report and hawkish ECB comments in response to upside surprise in Eurozone CPI that helped accelerate USD selling. ADP does have a spotty record but the soft August reading adds to the mounting evidence that the US economy isn't as strong as believed. More on the gas sector below. The NASDAQ charts below suggest a short-term trading opportunity in NASDAQ 100 based on 4 prior cases. We let the charts speak for themselves.
The ADP employment report showed the US adding just 374K jobs in August compared to 640K expected. That was compounded by the employment component of the ISM manufacturing report falling below 50.
The pandemic-era history of the ADP report and the small size of manufacturing employment in the US make both metrics questionable but they underscored the market's focus on jobs at the moment. The dollar fell 30-40 pips across the board on the data in only a small preview of the decline should non-farm payrolls match the miss.
Last week's surprise miss in the storage report helped to send gas prices into high gear in the US and into overdrive in Europe and Asia. The base case for global central banks is that the flattening of energy prices flattens out inflation but natural gas – which is critical in home heating and energy generation – could add another front to watch on prices; and one that could present a big headache for politicians and central bankers. Moreover, this is not traditionally the peak of natural gas prices for the year with every recent seasonal spike coming in the cold months. So expect to hear much more about NG and LNG in the months ahead.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.