The markets showed just how divergent they can be on Wednesday. Wall Street finished the day with large gains, supposedly based on the positive numbers coming from the ISM Manufacturing PMI. The USD traded weaker against the EUR before this data had come out however, and the greenback managed to still gain against the GBP. Also flying in the face of the better than expected Manufacturing report was a worse than expected ADP Non Farm Employment Change. In other words yesterday’s gains on Wall Street must be looked at with suspicion. Today the weekly Unemployment Claims will be released and a result of 476k is the estimate, which would be worse than last week’s outcome. While optimists certainly had something to grasp onto yesterday it will prove more than interesting to see if they can stay afloat before going into the weekend.
Traders have to take into consideration that the U.S. will celebrate Labor Day this coming Monday and that their short term positions could face volatility. Also it should be taken into account that Pending Home Sales and Factory Orders data will come from the U.S. today and this could provide investors with a whirlwind of figures to contemplate. The U.S. economy may have provided a glimmer of hope yesterday with an improved ISM Manufacturing PMI number, but it will take more than one report to reverse worries about unemployment, housing, and consumer spending. The USD faced mixed trading and investors may be expecting another two days of crosswinds in the currency markets.
Written by bforex.com
