JOLTS jolted the dollar

JOLTS  jolted the dollar

The market bounced back to life Tuesday as the Greenback was jolted by the JOLTS data

The JOLTS  jobs data was through the roof printing an all time record high and ignited a USD rally. But that was only half the positive storyline as a boisterous NFIB small business survey painted  a much better picture for the US economy than most believed

Two-way dollar risk is creeping back into the market calculus as chatter builds that the Fed curve is  underpriced

Speaking of Fed curves, the market is very keen to hear Fed Bill Dudley on Thursday – he’s been off the wires for a while.When the president of the powerful Federal Reserve Bank of New York speaks, the market listens. Given the recent run of solid employment data and a glint of inflation hitting the US economy, it’s possible he could provide a more sanguine view of the US economy while confirming the Fed is on track for a December rate hike.

But of course the Washington DC bedlam and North Korea’s sabre -rattling is muddying  the broader landscape.

Japanese Yen

The North Korean headlines will be in focus after the Washington Post reported North Korea has successfully produced a miniaturised nuclear warhead that can fit inside its missiles, crossing a key threshold on the path to becoming a full-fledged nuclear power, US intelligence officials have concluded in a confidential assessment.”

USDJPY has predictably come under pressure on YEN haven demand

Headlines are in full churn as reports are circulating North Korea is “carefully examining” a plan to strike the U.S. Pacific territory of Guam with missiles, after U.S. President Donald Trump told the North that any threat to the United States would be met with “fire and fury”.


Another washout on EURO longs after the sturdy JOLTS jobs report. While by no means a return to  US dollar glory days, the Euro is feeling a bit of pressure from the strong US economic data prints. Although the Euro has been trading poorly the past few days, the dips remain relatively shallow and not overly encouraging for the  US dollar bulls, as few as they may be.

Australian Dollar

The Australian dollar is trading in line with the broader USD strength.

Yesterday saw another solid NAB business conditions number keeping the Aud supported well above the key  0.7875 level. But the rally petered out at .7939 as we are starting to get lower highs on the shorter duration suggesting the .7875 could prove a magnetic level over the near term.But this is all about the USD and if we see a further extension on the US dollar correction that possibility could materialize.But in the meantime, traders look to keep powder dry until Friday, where all roads lead to the US CPI

On a side note,  given Australia’s vital role in the APAC supply chain,  it worth keeping an eye on the escalation of regional geopolitical risk as this could dampen sentiment quickly.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes