The USD is growing but is everything so good?
The recent US economic numbers are quite low but the USD keeps strengthening. The level of the jobless claims turned to be less then 400 k still these numbers are to big. The number of new job claims reached the point of 372k. As for the prospects we suppose the US labor market will continue to fall as there are new layoffs almost every day. For instance, Merrill Lynch fired 4000 of its staff and New York Times is going to cut 100 jobs. We have already considered the amount of US layoffs previously in this month. However we gave a bit wrong estimation as we supposed that job cuts in such companies as Dell, Motorola, ATA and Aloha Airlines will be at the point of 14k but it has reached 18k point.
As for the data reports we can see decrease to the 7 years ago level in the numbers of Philly fed survey. The only growth (by 0.1 percent) was reported according to leading indicators. Therefore the question arises – what is the reason of the USD growth? The answer is – the risk appetite. The level of the Dow Jones index is quite positive at the moment. And it seemed that any further moves will be good after the yesterday’s Dow hike. However the situation hasn’t improved. So, we suppose all traders should be quite careful when believing in USD growth.
