US Dollar edges lower ahead of Jobless Claims, trade data

• The US Dollar takes a step back with markets in a holding pattern towards Friday’s key NFP release. 
• Fed Chairman Jerome Powell issued a warning on the US debt’s unsustainable path. 
• The US Dollar Index (DXY) fails to close above the pivotal 106.50 level.  

The US Dollar (USD) trades marginally softer on Thursday as the dust settles over the French political drama. With the French government led by Prime Minister Michel Barnier out of the way, French President Emmanuel Macron begins the search for a new prime minister. In the US side,  Federal Reserve (Fed) Chairman Jerome Powell warned that the US debt is on an unsustainable path and needs to be addressed.  

On the economic data front, a calmer calendar is ahead compared to that of the past few days. the main elements will be the weekly Jobless Claims and the Challenger Job Cuts for November, as well as the Trade Balance data. Employment-related data could be important ahead of the Nonfarm Payrolls print on Friday. 

Daily digest market movers: November Job Cuts importance

• At 12:30 GMT, the Challenger Job Cuts report for November will be released. No estimation is available, and in October around 55,970 layoffs were reported. 
• Paul Atkins has been nominated to become the Chair of the US Securities and Exchange Commission (SEC) by President-elect Donald Trump. Bitcoin (BTC) got fired up on the back of that news and broke above $100,000 for the first time. Paul Atkins is known for being a Bitcoin enthusiast. 
• Weekly Jobless Claims data for the week ending November 29 is expected around 13:30 GMT. Expectations are for a small uptick to 215,000 from 213,000 last week. 
• Equities trade very mixed this Thursday. Despite the French political turmoil, European stocks are up near 0.50%. US Futures are still looking for direction, trading flat ahead of the US Opening Bell. 
• The CME FedWatch Tool is pricing in another 25 basis points (bps) rate cut by the Fed at the December 18 meeting by 74.0%. A 26.0% chance is for rates to remain unchanged. The Fed Minutes and recent comments from several Fed officials have helped the rate cut odds for December to move higher. 
• The US 10-year benchmark rate trades at 4.21%, roughly in the middle of this week’s range between 4.16% and 4.28%.

Economic Indicator

Challenger Job Cuts

Challenger Job Cuts, released by Challenger, Grey & Christmas monthly, provides information on the number of announced corporate layoffs by industry and region. The report is an indicator used by investors to determine the strength of the labor market. Usually, a high reading is seen as negative (or bearish) for the US Dollar (USD), while a low reading is seen as positive (or bullish).

Read more.

Next release: Thu Dec 05, 2024 12:30

Frequency: Monthly

Consensus: -

Previous: 55.597K

Source: Challenger, Grey & Christmas, Inc.

US Dollar Index Technical Analysis: Nothing moving between now and NFP

The US Dollar Index (DXY) is turning into a snooze fest, not set to wake up before the US Jobs report on Friday. With some lighter US data, only headline risk could take place in an otherwise calm Thursday. With the tight range in the US Dollar Index, the nearby levels at 106.52 and 105.53 remain pivotal to watch. 

On the upside, 106.52 (April 16 high) still remains the first resistance to look at after failing to close above it this week after several attempts. Should the US Dollar bulls reclaim that level, 107.00 (round level) and 107.35 (October 3, 2023, high) are back on target for a retest. 

Looking down,  the pivotal level at 105.53 (April 11 high) comes into play before heading into the 104-region. Should the DXY fall all the way towards 104.00, the big figure and the 200-day Simple Moving Average at 104.03 should catch any falling knife formation. 

US Dollar Index: Daily Chart

US Dollar FAQs

What is the US Dollar?

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from the Bank for International Settlements. Following the Second World War, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold until the Bretton Woods Agreement in 1971, when the Gold Standard went away.