The USD lost ground to both the EUR and GBP on Thursday in a broad market place that is showing signs of unrest. The weekly Unemployment Claims yesterday were negative, along with the Pending Home Sales and ISM Manufacturing PMI results. Today the Non Farm Employment Change numbers are on the schedule and will be watched by all. The jobless numbers are expecting to see a negative outcome today. The crux of the matter for investors is that U.S. data has been nothing short of disappointing for nearly a month now and sentiment is growing more nervous. Today’s data could prove the highlight of the week and because of the volatility already seen the past few trading sessions market participants will be on a razor’s edge if they are trying to make short term moves. Wall Street continued to produce bad results yesterday and this has done nothing to ease a general sense of weariness.
The USD moved to the lower side of its strong trend versus the EUR and GBP yesterday, and it will be interesting to see if this short term joust can continue before going into the long holiday weekend. Yesterday’s data confirmed what many investors have openly expressed the past few weeks, and that is – the U.S. economy is not as strong as government officials having been trying to sell the public. If poor jobless numbers confront the marketplace today – and this is likely – the government will have a tougher time selling its remedies which have largely proved ineffective thus far. The main problem facing the jobless situation in the States is the lack of private sector job creation. Also, faced with the additional burden of growing concerns for a sustainable recovery, corporations are likely to keep conservative hiring practices in place. Coupled with a housing market which has not shown signs of recovery, and was in the past ten years a creator of wealth until it collapsed, the recipe for a weak economy is strong. The USD has enjoyed a strong trend as a safe haven play, it may remain in this mode for a while yet, but there is a considerable amount of questions that are going to confront the American landscape too.
Written by bforex.com
