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Miss Drops USD/JPY but Claims Monthly Average Lowest Since 2007

Miss Drops USD/JPY but Claims Monthly Average Lowest Since 2007

Christopher Vecchio, CFA, Senior Strategist

THE TAKEAWAY: Initial Jobless Claims miss, suggesting that labor market remains in a cautiously improving state > Four-week claims average drops to 330.5K, lowest level since November 2007 > Firms may not be hiring, but firings remain at a low rate > USDJPY BEARISH

The first important data this week for the US economy has come across mixed, and the US Dollar is selling off as a result. Overall, the US Dollar remains a top performer following the July FOMC Minutes, but is seeing an intraday patch of softness amid the miss on the headline claims numbers.

Here are the data provoking the pullback in the buck:

- Initial Jobless Claims (AUG 17): 336K versus 330K expected, from 323K (revised higher from 320K)

- Continuing Claims (AUG 10): 2999K versus 2963K expected, from 2970K (revised higher from 2969K)

With the data missing the headline prints, the US Dollar has come off a bit but the losses have been insulated given improvement in the monthly tracking metrics. The four-week/monthly Initial Jobless Claims average dropped to 330.5K, the lowest level of 2013 and the lowest since November 2007. Accordingly, with signs that the labor market is healing back to pre-2008 crisis levels, the buck has held up well.

Read more: Global Growth Fears Quelled After Chinese, Euro-Zone PMIs; AUD on Top

USDJPY 1-minute Chart: August 22, 2013

Miss_Drops_USDJPY_but_Claims_Monthly_Average_Lowest_Since_2007_body_Picture_1.png, Miss Drops USD/JPY but Claims Monthly Average Lowest Since 2007

Charts Created using Marketscopeprepared by Christopher Vecchio

Following the data, the USDJPY slipped from ¥98.65 (just off the session high set at 98.80) to as low as 98.39, but at the time this report was written, the pair had rebounded to 98.46. Senior Technical Strategist Jamie Saettele noted in the DailyFX Real Time News feed earlier that the USDJPY is showing signs of basing and looks to be bought on dips.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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

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