Article by ForexTime
The U.S. dollar is being sold across the board early Thursday as traders continued to digest yesterdays Fed minutes. Although most Fed officials believe that growth may surpass their previous forecast due to the expected expansionary fiscal policies, like many of us, they have no clear idea yet on what exactly is going to be implemented and to what extent it will impact economic growth, employment and inflation. However, it had become obvious now that the increase of expected interest rate hikes in 2017 from two to three was largely based on the unknown.
The dollar’s index price action suggests that Trump’s rally has almost come to an end after posting a new 14-year high of 103.82 on Tuesday, and now actions are required to see further gains. Until then, economic data are likely to take over the lead. Friday’s U.S. labor report is going to be a key, and although Nonfarm payrolls are expected to come at 175K, traders should focus on other components of the report, especially the average hourly earnings which dropped by 0.1% in November. Today’s non-manufacturing ISM and ADP reports will probably create some noise but tomorrow’s releases will confirm whether the dollar will find support or continue correcting to the downside.
U.S. stocks are still attempting to make new highs, with the Dow once again falling 44 points short of the key 20,000 psychological level. This is the third consecutive week were bulls fail to break above this level which could be a sign that bears might take over control on the short run, and if the dollar weakness today promotes a selloff in European equities this is likely to extend over to the U.S. session.
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Article by ForexTime
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