Currency Note US Dollar

US Dollar still, broadly, in the ascendancy

By Ricky Bean December 5th, 2014

The US dollar has again seen a mixed week, as varying factors have impacted on the markets. The week saw the dollar lose some ground against most of its major peers, thanks to recovering commodity prices and lower Black Friday spending reports. However, positive manufacturing data helped to curb these losses, and the currency saw a reversal to gain ground as positive speculation over the US economy’s relative strength added to the dollar’s strength.

Mid-week saw the strength continue, although not against an even stronger sterling. The dollar’s performance was helped against most of its peers by the independent non-farm employment change figure, which posted a figure above 200,000 for the seventh time in eight months. Non-manufacturing Purchasing Managers’ Index (PMI) also showed good expansion, which helped support the gains. Yesterday was less impressive, despite some solid – if uneventful – labour data. The unemployment claims was in line with expectations, while the Beige Book from the US Federal Reserve stated that employment gains were widespread. However, the dollar lost ground against a stronger euro.

Today ends the week with the ever-important official non-farm employment change figure. This often provides some activity in the markets given its unpredictable nature, and will also be supported by trade balance data and the unemployment rate.