The USD continued to lose ground to the major currencies across the spectrum on Tuesday. Data from the States produced another lackluster day and will likely set the tone for a rather cautious approach going into the critical Non Farm Employment Change numbers Friday. Pending Home Sales figures were negative with an outcome of minus -2.6%, well below the expected gain of 0.5%. Factory Orders and Personal Spending statistics were equally disappointing. Optimists essentially had water thrown on them yesterday and now they will be confronted by a parade of jobless data which begins in earnest today. The ADP Non Farm Employment results will be released and are anticipated to produce a gain of 38K. The ISM Non Manufacturing PMI is on schedule too and is expected to have a reading of 53.2, which would be below the previous month’s results.
The word of the day should be ‘fragile’. While risk appetite has been quite apparent in the broad marketplace the past few weeks as equities have turned in polite gains, the fact is that the bourses and currencies are very much the playground of traders. Yesterday’s data from the States should serve as a stark reminder that it remains on perilous footing along with its major counterparts in turn. Housing and consumer spending/ confidence is not strong and until there is an improvement in these categories the fate of the U.S. economy will be murky. The jobless data that will start arriving at the doorstops of investors today, and it will continue tomorrow with the weekly Unemployment Claim. This will be followed by the government’s Non Farm numbers Friday, which will certainly affect sentiment. And sentiment is what has been driving the markets the past month and the USD will feel its wake.
Written by bforex.com
