USDOLLAR at Key Resistance; Euro Hurt by Slipping Inflation Data
- August is typically a bad month for risk and a good month for the US Dollar - see the August forex seasonality report.
The US Dollar has been on a nice little run the past few days, bolstered by the synchronous message from Fed officials at the Jackson Hole Economic Policy Symposium that a rate hike is coming...soon. As markets grapple with the timing of such an event - flirting with September but comfortable with December as of now - it's clear that US Dollar bullish sentiment is fragile in its nascent stage.
Accordingly, with labor market data due out over the next two days, in particular, today's ADP Employment report (which tends to have a contemporaneous relationship with headline NFPs, not necessarily a leading indicator), investors will start to try and front-run Friday's report. Given how low participation rates are - it is the last unofficial week of the summer - an extreme reading today (terrible or extraordinary, just not Golidlocks) could spark volatility anew.
--- Written by Christopher Vecchio, Currency Strategist
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