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Graphic Rewind: Greenback Trades Higher as Data Gives Mixed Signals

Graphic Rewind: Greenback Trades Higher as Data Gives Mixed Signals

Gary Kerdus,

THE TAKEAWAY: The dollar rallied on moderate domestic spending growth yet sold sharply as a weak labor market and soft manufacturing sector likely reminds traders why the Fed promised to ease further.

US Dollar Index, 1 Hour Chart

Graphic_Rewind_Greenback_Flows_Higher_as_Data_Gives_Mixed_Signals__body_Picture_1.png, Graphic Rewind: Greenback Trades Higher as Data Gives Mixed Signals

The US Dollar Index initially traded higher as personal spending and income figures came across the wires pointing toward moderate earnings and consumption growth, potentially stirring optimism among greenback traders that consumer spending - which accounts for roughly 70 percent of domestic trade - may provide an additional boost to economic activity. Meanwhile, later in the trading week the greenback found further support as car sales continued to trend moderately higher suggesting the credit tap continues to flow alongside consumer’s increased appetite for durable goods indicating domestic strength.

However, selling pressure ensued as the economy lost 376,000 new workers to unemployment in September along with declining manufacturing activity which likely reminded markets that the world’s most powerful economic engine is far from perfect underscoring the recent FOMC decision to ease further.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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