News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.13% 🇨🇭CHF: 0.08% 🇪🇺EUR: 0.02% 🇨🇦CAD: -0.07% 🇳🇿NZD: -0.10% 🇦🇺AUD: -0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/P2eGs7wOLQ
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: France 40: -0.10% Wall Street: -0.14% US 500: -0.15% Germany 30: -0.23% FTSE 100: -0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/UTmuwSgVa6
  • Mayor of Los Angeles says the city is near 'devastating' tipping point following announcement of city wide stay-at-home order $DXY $SPX
  • Mayor of Los Angeles orders a stay-at-home order amid rising Covid cases $DXY $SPX
  • The dispute between the Federal Reserve and the Treasury Department concerned economists and government officials last week. Traders, however, appeared unfazed as U.S. equity markets proceeded to higher ground. Get your market update from @FxWestwater here:https://t.co/DKK7WWHKlu https://t.co/K1f9Y1h4sn
  • China official urges preparation for Covid vaccine production - Xinhua via BBG
  • Over the past seven days, $EUR has been the best performing G10 major vs the #USD with a 1.66% spot return while $GBP has been the worst at -0.11% spot return $EURUSD $GBPUSD $DXY
  • The US Dollar (via the DXY Index) has hit fresh lows amid the latest headlines around US fiscal stimulus talks. Get your market update from @CVecchioFX here:https://t.co/yDXdpZIcxq https://t.co/GlSrdNjEeZ
  • Commodities Update: As of 03:00, these are your best and worst performers based on the London trading schedule: Gold: 0.22% Oil - US Crude: 0.14% Silver: -0.21% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/WR0TUUbAnB
  • Forex Update: As of 03:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.12% 🇨🇭CHF: 0.09% 🇪🇺EUR: 0.08% 🇨🇦CAD: -0.02% 🇯🇵JPY: -0.03% 🇳🇿NZD: -0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/mgBg1eesms
Strong US Jobs and Inflation Data Boosts Gives the US Dollar a Short-Lived Rally

Strong US Jobs and Inflation Data Boosts Gives the US Dollar a Short-Lived Rally

2017-09-14 13:30:00
Dylan Jusino,
Share:

Talking Points:

- The Consumer Price Index (CPI) came in at 1.9%, slightly higher than estimates at 1.8%; core inflation also beat expectations at 1.7% versus the expected 1.6%.

- Third rate hike for 2017 is back in play at around 50/50 split.

- The US Dollar given a boost against the Canadian Dollar but it didn’t last long.

- See the DailyFX Economic Calendar for upcoming economic data and for a schedule of live coverage see the DailyFX Webinar Calendar.

Consumer Price Index

Markets are pleased with the inflation and jobs data coming out of the United States this morning. The headline CPI YoY figure for August came in at 1.9% beating estimates at 1.8%. The core figure was also better than the expected 1.6% coming in at 1.7%.

CPI assesses changes in the cost of living by measuring changes consumer pay for a set of items. CPI serves as the headline figure for inflation. Simply put, inflation reflects a decline in the purchasing power of the dollar, where each dollar buys fewer goods and services. In terms of measuring inflation, CPI is the most obvious way to quantify changes in purchasing power. The report tracks changes in the price of a basket of goods and services that a typical American household might purchase. An increase in the Consumer Price Index indicates that it takes more dollars to purchase the same set basket of basic consumer items. Inflation is generally bad news for the economy, causing instability, uncertainty and hardship.

US Labor Market

We also saw strong figures from data from the Initial Jobless Claims report which came in at 284k versus 300k expected. Continuing claims also beat estimates at 1944k versus the expectation of 1965k. The trend of a tightening labor market continues and so does stagnant wages. In August, average weekly earnings increased by a meager 0.9% versus 1.1% in July.

The Next Rate Hike

CME Group’s FedWatch Tool now sees a near 50-50 chance that the Fed will raise rates in December. The chart below shows a 48% chance that rates will increase by at least 25 bps by the end of 2017. This model is subject to change given further economic developments. The Fed’s 2% inflation target is a strong determinant of a rate hike.

Strong US Jobs and Inflation Data Boosts Gives the US Dollar a Short-Lived Rally

Source: CME Group FedWatch Tool

Below is a list of economic releases that has driven the US Dollar higher:

- USD Initial Jobless Claims (Sept 9): +284K versus +300K expected, from +298K

- USD Continuing Claims (SEP 02): +1944K versus +1965K expected, from +1951K previous (revised higher from 1940K)

- USD Real Avg Weekly Earnings (YoY) (AUG): +0.9% versus +1.1% previous

- USD Real Avg Hourly Earnings (YoY) (AUG): +0.6% versus +0.7% previous

- USD Consumer Price Index (MoM) (AUG): +0.4%versus 0.3% expected, from 0.1% previous

- USD Consumer Price Index (YoY) (AUG): +1.9%versus 1.8% expected, from 1.7% previous

- USD Consumer Price Index Ex Food & Energy (YoY) (AUG): 1.7% versus 1.6% expected, from 1.7% previous

See the DailyFX economic calendar for Thursday, September 14, 2017

Chart 1: USDCAD Index 15-minute Chart (September 14, 2017 Intraday)

Strong US Jobs and Inflation Data Boosts Gives the US Dollar a Short-Lived Rally

The chart above shows that the US Dollar rallied against the Canadian Dollar but it was short-lived. After reached 1.2239, USDCAD retraced down to 1.2194 as traders faded out the move.

--- Written by Dylan Jusino, DailyFX Research

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

DISCLOSURES