fxs_header_sponsor_anchor

News

US Dollar Index sees a downside to near 111.00 amid lower consensus for US NFP

  • The DXY may decline towards 111.00 after surrendering the immediate support of 111.47.
  • A downbeat US ISM Manufacturing PMI data is the leading downside trigger this week.
  • Investors are also discounting the weaker consensus for the US NFP data.

The US dollar index (DXY) is oscillating around the critical support of 111.48 in the Tokyo session. The asset is expected to deliver a downside break and will decline further towards the cushion of 111.00. For the past two trading sessions, the DXY bulls are attempting to cross 112.50 but a failure in doing the same weakened the DXY.

Downbeat Manufacturing PMI leads the downside triggers

A downbeat reading of the US ISM Manufacturing PMI has raised concerns over the sustainability of the longer-term upside bias in the DXY. The extent of manufacturing activities is declining in the US economy as higher inflationary pressures have trimmed retail demand by the households and eventually forced the producers not to exploit their entire capacity.

The US ISM Manufacturing PMI declined to 50.9 vs. the expectations of 52.2 and the prior release of 52.8. Apart from that, weaker New Orders Index data has also plunged. The economic indicator that reflects forward demand for manufacturing activities slipped to 47.1 against the projections of 49.6 and the former figure of 51.3.

Lower consensus for the US NFP data

Subdued preliminary estimates for the US Nonfarm Payrolls (NFP) data is been discounting the market participants. As expected, the US economy created 250k jobs in September, lower than the August reading of 315k. The US economy has been maintaining full employment levels, therefore, space for generating more employment is extremely less. Adding to that, the escalating Federal Reserve (Fed)’s interest rates are also restricting the corporate to continue their hiring programs with sheer pace.

What could dampen the DXY’s appeal further is the Average Hourly Earnings data. The projections are indicating a soft landing at 5.1% vs. the prior release of 5.2%. In time, when households are facing the headwinds of mounting inflation, lower earnings would be insufficient to offset the inflated payouts.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.