Data from the U.S this week tells a tale of U.S expansion, but in moderation.
Surprise unemployment data out on Thursday displayed a picture of slow growth and economic expansion with a nine-week low on initial jobless claims.
The greenback is losing its grip on the euro – EURUSD up by 1.6% since Wednesday - due to some poor expectations on U.S data being announced on Thursday and Friday with figures on published initial jobless claims and expected non-farm payrolls demonstrating the slowdown in the U.S labour market – one of the key factors of the economic growth plan initiated by the FED.
The Labor Department recorded U.S Continuing Jobless Claims falling to 2,325K versus expectations of 2,405K and previous of 2,413K, whilst Initial Jobless Claims fell to their second lowest in at least a year at 268K versus a forecast of 285K and previous 288K,.
Also featuring on Thursday’s economic calendar was US Factory Orders, month on month for February, which reported 0.2%, well above expectations of -0.5% and previous of -0.7%; this higher than anticipated figure broke the 7 month run of lower than expected figures. This data would normally be bullish for the dollar but with the greenback in a lull and companies losing on foreign exchange rate, it is the domestic market that the States has to fall back on. The unemployment data, though sluggish, does indicate that employers are not firing as many workers, which in turn will lead to more security alongside consumer confidence and spending. Consumer spending has been slow throughout February with snow storms and bad weather keeping shoppers at home.
U.S Nonfarm Payrolls, one of the major indicators of the economy, is reporting on Friday. The change in the number of people employed for March is expected to be 245K versus February’s figure of 295K. If the prediction is validated then the lower than expected figure should prove bearish for the U.S dollar.
MT4 chart: EURUSD
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