Thread: USD Unemployment Claims

Indications before the release of Non-Farm Payrolls, is that jobless claims will probably remain similar to last week’s number of 457K. This gauge remained in a narrow range between 440K to 480K in recent months. When it dropped to 429K three weeks ago, this was merely a wrong calculation. Only a big drop may boost the US dollar, as this may trigger risk aversion.

The USD bounced back in value on Wednesday as the broad markets remained cautious particularly without much economic data on the calendar. The greenback pushed the EUR and GBP back to lower realms and is now near short term highs against both currencies. Wall Street turned in miniscule gains and continues to give the impression that it is merely treading water as it waits for impetus. Today the weekly Unemployment Claims and the Philly Fed Manufacturing Index reading will be released. The jobless situation in the States remains a vital lynchpin regarding investor sentiment as they continue to question where job creation is going to come from. Part of the problem is that small and medium sized businesses are still finding it difficult to borrow money from banks in the U.S. and this is where a large amount of new hiring traditionally has come from.

Both the weekly Unemployment Claims and Philly Fed reports are expected to turn in better results. However given the rather negative trends in data recently traders will have to be ready for any surprises. The weekly Unemployment Claims carry an estimate of 478k and the previous week produced a number of 484k. The Philly Fed forecast calls for a mark of 7.1 and the previous outcome was 5.1. Given that the Empire State Manufacturing numbers early this week were not positive investors will watch the Philly outcome carefully. Tomorrow will be absent of data from the U.S. and the marketplace is likely to begin trying to gauge how next week’s Existing Home Sales and New Sales will turn out. Volumes in the broad markets remain relative light due to the dead of summer being upon us and investors who continue to show that they are tentative. The USD is likely to range trade today based on existing sentiment, but market participants will have to be ready for the data on the schedule.

Eight states reported statistically significant over-the-year jobless
rate decreases in August, the largest of which were in Alabama
(-1.4 percentage points), Tennessee (-1.3 points), and North Carolina
(-1.2 points). Montana and Florida recorded the only significant rate
increases from August 2009 (+1.0 and +0.7 percentage point, respectively).
The remaining 40 states and the District of Columbia registered
unemployment rates that were not appreciably different from those of
a year earlier.

Given the fact that Florida has been depressed for such a long time, it is a good sign that it increased.