US Dollar Gains Ahead of NFP Data
The US Dollar (USD) strengthened on Thursday, supported by comments from former Federal Reserve Bank of New York President William Dudley, who suggested a 25 basis point rate cut as the most appropriate path forward given current economic conditions. This diminished expectations for a larger rate cut in November.
Key Economic Indicators:
- Jobless Claims: Weekly Jobless Claims remained relatively steady at 225,000.
- Purchasing Managers Index (PMI): The S&P Global Services PMI and the Institute for Supply Management (ISM) September numbers were released, with mixed results.
- Job Openings: The JOLTS Job Openings data showed an increase in August.
Market Sentiment and Fed Rate Expectations:
- The Japanese yen weakened after comments from new Prime Minister Shigeru Ishiba suggesting no need for further interest rate increases.
- The Bank of England's Governor Andrew Bailey hinted at the possibility of aggressive rate cuts.
- The CME FedWatch Tool shows a 67.4% chance of a 25 basis point rate cut at the next Fed meeting.
Technical Analysis: US Dollar Breaks Out
The US Dollar Index (DXY) has broken above its recent trading range, reaching a new high. The 55-day Simple Moving Average (SMA) is at 102.09, with potential resistance at 103.18. On the downside, support levels are at 100.62, 100.16, and 99.58.