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US Dollar (DXY) Reinforced by Sustained Hawkish Fed Speak and US NFP Bets

US Dollar (DXY) Reinforced by Sustained Hawkish Fed Speak and US NFP Bets

Nick Cawley, Senior Strategist

US Dollar Price and Chart Analysis

  • Fed members in hawkish overdrive.
  • NFPs will give further US job market clarity.
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A constant stream of hawkish Fed speakers is propping up the US dollar and keeping US Treasury yields close to fresh multi-year highs. Over the past week, the overriding message from an army of Federal Reserve board members is that the US central bank will continue to hike rates to combat runaway inflation despite fears of sizeable job losses. The recent hopium that the Fed may pivot in November has been pushed aside with markets now increasing their bets that the Fed will stand firm in their fight against inflation. While the constant stream of hawkish chatter is keeping the US dollar and short-term interest rates elevated, there will come a time when markets begin to look through this constant refrain, leaving their focus fully on US hard data releases and the Fed chair Jerome Powell’s subsequent action.

With US data releases now becoming even more important for market traders, today sees the latest US Jobs Report released at 13:30 BST. With the Fed now preparing the market for job market weakness, today’s numbers will be closely parsed for any indication that the labor market is weakening.

On Tuesday, the latest JOLTs job openings data showed a sharp decrease in open job positions. The data for August showed open job positions falling to 10.053 million from a prior month’s 11.17 million and missing expectations of 10.775 million. The number of job openings was the lowest since June 2021.

For all market-moving data releases and economic events see the real-time DailyFX Calendar.

JOLTs Monthly Data

Chart via TradingEconomics

For all market moving data releases and economic events see the real-time DailyFX Calendar.

The daily DXY chart shows the US dollar bouncing off support around 110, an area that has prompted support over the last couple of weeks. The DXY continues to print higher highs and higher lows and is now back above the 20-day sma, another bullish impulse, while the CCI suggests that the market trend is neutral.

US Dollar Basket (DXY) Daily Price Chart – October 7, 2022

What is your view on the US Dollar – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

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