Yahoo Finance Increased Risk Appetite Ahead of Jobs Report Boosts U.S. Dollar
The U.S. Dollar rose to its highest level against a basket of major currencies since November 21 on Thursday on increased risk appetite and optimism the U.S. Senate will successfully push through a tax reform program.
March U.S. Dollar Index futures settled at 93.414, up 0.177 or +0.19%.
Helping to boost the index was the rise in the Dollar/Yen. The Forex pair was supported by the return of stock market investors looking to take on risk. The dollar picked up ground against the Euro, Australian and New Zealand Dollars in anticipation of Friday’s U.S. jobs report. The non-farm payrolls data is not expected to make a very large impact on the Fed’s decision to raise rates later this month or the U.S. Dollar. However, unless there is a substantially negative deviation from the forecasts.
U.S. Economic News
Global outplacement consultancy Challenger, Gray & Christmas said U.S.-based employers announced plans to cut payrolls by 35,038 jobs in November. That was the most in seven months and was up 17 percent from October. The trend in layoffs, however, remains low. Employers have announced 386,347 job cuts through November, down 22 percent compared to the same period last year and the lowest since 1997.
The number of Americans filing for unemployment benefits unexpectedly fell last week, suggesting a rapid tightening of the labor market that bolsters expectations the Federal Reserve will raise interest rates next week.
Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 236,000 for the week-ended December 2, the Labor Department said on Thursday. Economists had forecast claims rising to 240,000 in the latest week.
Gold
Gold futures fell a little over 1 percent on Thursday, hitting its lowest level since July 18. The catalysts behind the selling pressure were a stronger U.S. Dollar, increased demand for higher risk assets and optimism about passage of a U.S. tax overhaul.
Crude Oil
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures settled higher on Thursday after reaching their lowest levels since mid-November. Technical factors may have played a role in the move since the markets had reached so-called oversold territory.
Buyers may have also showed a delayed reaction to Wednesday’s U.S. Energy Information Administration’s weekly inventories report which showed a bigger than expected drop in crude oil stocks. Traders may have also overreacted to a massive rise in gasoline and distillate stocks, drawing the attention of bargain-hunters.
U.S. Equity Markets
The major U.S. stock indexes rose on Thursday as investors returned for a second day following a slump earlier in the week. Most of the gains were fueled by strength in technology stocks.
The Dow and S&P 500 Index futures were boosted by information technology which was among the best-performing sectors. The NASDAQ Composite was driven higher by strong performances in shares of Facebook and Amazon.
The major indexes were also underpinned by optimism over the progress of U.S. tax reform and a possible short-term solution to a government shutdown this weekend.
Late in the session, material stocks rose on news that President Donald Trump plans to unveil an infrastructure spending plan in 2018.
This article was originally posted on FX Empire
