US jobless claims plunge to 292K, but data is skewed – dollar rises

US unemployment claims dropped to 292K. This is a huge surprise. They were expected to rise from 323K (before revisions) to 332K now. This huge drop could be a one time statistical error, as it is an outlier. However, even if it corrected to 200K-310K, the figure is very encouraging and cements QE tapering in less than a week.

The dollar was strengthening towards the publication, recovering from the losses seen in recent days and now extends its gains. — updates coming –

Data

• Update on jobless claims: the drop in jobless claims is blamed on two US states that upgraded their computer systems. This is the first drop below 300K since 2007, but it will surely be revised higher.
• Continuing claims dropped to 2.87 million, also a big surprise: they stood on 2.94 million last week. The break below 3 million now seems sustained.
• Import prices remained flat. They were predicted to rise by 0.6%.

Currency reaction

• EUR/USD dopped as low as 1.3256. It was already on a slide earlier as EZ industrial output disappointed with a big drop. This ended the nice euro rally.
• USD/JPY rose back above 99.50. There is still a lot of uncertainty about the sales tax.
• GBP/USD finds it hard to hold on to 1.58, a line it struggled with earlier. The pound dropped before the BOE testimony, and advanced afterwards. Carney mentioned that rate hikes will precede the unwinding of QE.
• AUD/USD only temporarily dipped below support at 0.9233, but recovered quickly. It fell to this line after weak employment data.
• USD/CAD continues recovering and trades at 1.0322. In Canada, the NHPI rose by 0.2%, exactly as expected. The fall in oil prices is also felt.

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Forex - Dollar mostly higher in Asia, boosted by tapering chatter

The U.S. dollar traded higher against most of its major rivals during Friday’s Asian session as some decent economic data and waning Syrian tensions bolstered the case for a Federal Reserve tapering announcement as soon as next week. 

In Asian trading Friday, EUR/USD inched down 0.03% to 1.3296. after data showed that industrial production in the euro area fell by 1.5% in July, the biggest drop in 12 months. Analysts had forecast a 0.1% decline. 

On a year-over-year basis industrial production fell 2.1% to the lowest level since April 2010, compared to expectations for a 0.1% decline. 

Separately, the European Parliament approved legislation to allow the European Central Bank to oversee banks in the 17 nation currency bloc. ECB President Mario Draghi said the vote was “a real step forward” in establishing a banking union. 

GBP/USD nudged down 0.04% to 1.5799 on what appeared to be some profit-taking after sterling hit fresh multi-month highs against the greenback Thursday. 

USD/JPY rose 0.10% to 99.67 as investors are expecting the Federal Reserve to announce plans to taper its USD85 billion in monthly asset purchases at its Sept. 17-18 meeting.

Stimulus tools such as Fed asset purchases weaken the dollar by driving down borrowing costs, and talk of their dismantling can strengthen the greenback. 

USD/CHF rose 0.08% to 0.9314 while USD/CAD inched up 0.03% to 1.0327 after the International Energy Agency said that oil supplies from the Organization of the Petroleum Exporting Countries fell by 260,000 barrels to 30.51 million barrels per day in August, due to declining output from Libya. 

In U.S. economic news out Thursday, initial claims for jobless benefits fell by 31,000 to 292,000 last week. Economists expected a reading of 330,000 claims. The less volatile four-week moving average fell to 321,250 from 328,750. That is the lowest reading since October 2007. 

AUD/USD fell 0.08% to 0.9265 while NZD/USD nudged down 0.02% to 0.8137. The U.S. Dollar Index rose 0.05% to 81.73.

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Forex Trading Signal for 13th September 2013

                                                                                


Japan (Tokyo)                               United Kingdon (London)                        USA (New York)

For more easy access,,,,,,Download our mobile application on your mobile :   Click Fxsignals 

EUR/USD

 Up Trend :

 (1) BUY

E/P: 1.32987

T/P: 1.33500

S/L: 1.32400

 (2) SELL

E/P: 1.32710

T/P: 1.32000

S/L: 1.33400

GBP/USD

Down Trend:

(1) SELL

E/P: 1.58069

T/P: 1.57500

S/L: 1.58500

(2) SELL

E/P: 1.57600

T/P: 1.57000

S/L: 1.58500

NOTE: The above posted Signals are delayed 2 - 4 hours after it has been  generated.
Daily forex signals are sent ontime to only our subcribers.

To subcribe: click here

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U.S. stocks fall as profit taking marks quiet session; Dow down 0.17%

U.S. stocks fell in a lackluster session on Thursday after investors locked in gains stemming from expectations the Federal Reserve will keep policy loose even if it tinkers its bond-buying program this month.

At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.17%, the S&P 500 index fell 0.34%, while the Nasdaq Composite index fell 0.24%.

Sentiments have grown recently that even if Federal Reserve announces plans to taper its USD85 billion monthly asset purchases at its Sept. 17-18 meeting, adjustments will likely be slight, which has given stocks room to rise until profit taking kicked in on Thursday.

Fed asset purchases, which include Treasury holdings and mortgage debt, spur recovery by driving down long-term interest rates, which are bullish for stocks.

Elsewhere, the Department of Labor reported earlier that the number of individuals filing for initial jobless claims in the U.S. fell by 31,000 to 292,000 from 323,000 in the previous week.

Analysts were expecting the number to rise by 7,000 to 330,000, though the report said the decline was largely due to two states not processing all of their claims because of computer upgrades.

Investors also avoided stocks to track diplomatic talks between the U.S. and Russia over disarming Moscow ally Syria.

Leading Dow Jones Industrial Average performers included Walt Disney, up 2.47%, Verizon, up 1.81%, and AT&T, up 1.21%.

The Dow Jones Industrial Average's worst performers included JPMorgan Chase, down 1.90%, Hewlett-Packard, down 1.35%, and DuPont, down 1.31%.

European indices, meanwhile, finished largely lower

After the close of European trade, the EURO STOXX 50 fell 0.09%, France's CAC 40 fell 0.30%, while Germany's DAX 30 finished fell 0.02%. Meanwhile, in the U.K. the FTSE 100 finished up 0.01%.

On Friday, the U.S. will release data on retail sales, producer price inflation and preliminary data from the University of Michigan on consumer sentiment.

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Forex - Dollar softens as market braces for Fed stimulus decision

The dollar softened against most major currencies in U.S. afternoon trading on Thursday after market participants bet the Federal Reserve will keep overall policy loose at a monetary policy meeting next week even if it tapers its monthly asset-purchasing program.

Stimulus programs such as the Fed's monthly USD85 billion in asset purchases keep the dollar weak by driving down long-term interest rates.

In U.S. trading on Thursday, EUR/USD was down 0.08% at 1.3299, mainly due to soft European output numbers.

Many investors expect the Federal Reserve to announce plans to taper its monthly asset purchases at its Sept. 17-18 meeting.

However, expectations that the Fed will only slightly cut the amount of bonds it purchases each month — if it decides at all — sent investors chasing safe-haven yen positions against the greenback on Thursday.

Elsewhere, the Department of Labor reported earlier that the number of individuals filing for initial jobless claims in the U.S. fell by 31,000 to 292,000 from 323,000 in the previous week.

Analysts were expecting the number to rise by 7,000 to 330,000, though the report said the decline was largely due to two states not processing all of their claims because of computer upgrades.

The euro meanwhile, slid against the dollar after data revealed that industrial production in the euro area fell by 1.5% in July, the biggest drop in a year. 

Analysts were expecting a 0.1% decline. 

On a year-over-year basis industrial production fell 2.1% to the lowest level since April 2010, compared to expectations for a 0.1% decline.

Elsewhere, the greenback was up against the pound, with GBP/USDdown 0.08% at 1.5806.

The dollar was down against the yen, with USD/JPY down 0.45% at 99.45, and down against the Swiss franc, with USD/CHF trading down 0.02% at 0.9304.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.09% at 1.0328, AUD/USD down 0.72% at 0.9261 and NZD/USD trading up 0.72% at 0.8140.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.02% at 81.70.

On Friday, the U.S. will release data on retail sales, producer price inflation and preliminary data from the University of Michigan on consumer sentiment.

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Forex - EUR/USD moves sideways as markets brace for Fed decision

The dollar traded sideways to higher against the euro on Thursday as investors jumped to the sidelines to await the Federal Reserve's decision next week on the fate of its monthly USD85 billion bond-buying program.

In U.S. trading on Thursday, EUR/USD was down 0.08 % at 1.3299, up from a session low of 1.3258 and off from a high of 1.3324.

The pair was likely to find support at 1.3105, Friday's low, and resistance at 1.3280, Monday's high.

The dollar strengthened on expectations that the Federal Reserve will announce plans to taper its USD85 billion in monthly asset purchases at its Sept. 17-18 meeting.

Stimulus tools such as Fed asset purchases weaken the dollar by driving down borrowing costs, and talk of their dismantling can strengthen the greenback.

Further fueling talk of less dovish Federal Reserve were better-than-expected weekly jobless figures.

The Department of Labor said earlier that the number of individuals filing for initial jobless claims in the U.S. fell by 31,000 to 292,000 from 323,000 in the previous week.

Analysts were expecting the number to rise by 7,000 to 330,000, though the report said the decline was largely due to two states not processing all of their claims because of computer upgrades.

Capping the dollar's gains, however, were expectations that the Fed will only slightly cut the amount of bonds it purchases each month.

The euro meanwhile, slid against the dollar after data revealed that industrial production in the euro area fell by 1.5% in July, the biggest drop in a year. 

Analysts were expecting a 0.1% decline. 

On a year-over-year basis industrial production fell 2.1% to the lowest level since April 2010, compared to expectations for a 0.1% decline.

Elsewhere, the euro was down against the pound and down against the yen, with EUR/GBP trading down 0.01% at 0.8413 and EUR/JPY trading down 0.63% at 132.14.

On Friday, the U.S. will release data on retail sales, producer price inflation and preliminary data from the University of Michigan on consumer sentiment.

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Gold prices drop as markets brace for Fed tapering

Gold prices dropped on Thursday after investors took up positions on expectations that the Federal Reserve next week will announce plans to begin tapering its monthly USD85 billion asset-purchasing program.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,330.70 during U.S. afternoon hours, down 2.43%.

Gold prices hit a session low of USD1,326.10 a troy ounce and high of USD1,366.60 a troy ounce.

Gold futures were likely to find support at USD1,315.40 a troy ounce, the low from Aug. 14, and resistance at USD1,416.30, Tuesday's high.

The December contract settled down 0.01% at USD1,363.80 a troy ounce on Wednesday.

Consensus began to build on Thursday that the Federal Reserve will announce plans to begin tapering its monthly USD85 billion asset-purchasing program at its Sept. 17-18 policy meeting, especially on the coattails of improving data out of the U.S. labor market hitting the wire earlier.

The Department of Labor said earlier that the number of individuals filing for initial jobless claims in the U.S. fell by 31,000 to 292,000 from 323,000 in the previous week.

Analysts were expecting the number to rise by 7,000 to 330,000, though the report said the decline was largely due to two states not processing all of their claims because of computer upgrades.

Still, investors sold gold on sentiments that the size of Fed asset purchases may soon begin to fall.

Monetary stimulus programs such as Fed asset purchases weaken the dollar to spur recovery, which makes gold an attractive hedge.

Elsewhere on the Comex, silver for December delivery was down 4.14% at USD22.212 a troy ounce, while copper for December delivery was down 1.47% and trading at USD3.209 a pound.

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