Thursday, January 9, 2014

USD Stronger Againt Major CCY After Stronger Than Expected Jobs Data and The Release of FOMC Minutes

Safe haven currency USD has strengthened against a basket of currencies after stronger than expected jobs data and the release of FOMC minutes. The Federal Reserve's December transcript provided further insight into administrators tapering expectations as "A majority of participants judged that the marginal efficacy of purchases was likely declining as purchases continued".

The suggestion that continued stimulus was beginning to return a diminished benefit was enough for investors to assume continued tapering throughout 2014 despite the absence of a clear and concise reduction schedule. US Dollar gains were further solidified as a preliminary ADP employment change report suggested more jobs were added in December than expected.

Unemployment is a key focus for the Federal Reserve in reducing further Bond purchases and any improvement in the labour force will only serve to solidify market expectations of continued tapering. Safe haven currency Greenback trades now at 1 month highs against the Euro and 4 month highs against its 10 major counterparts according to Bloomberg's Dollar Spot Index.

Further direction will come from the ECB meeting today and Non-Farm Payroll due Friday as we roll into a busy and volatile end to the week.      

Source: ozforex

No comments:

Post a Comment