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2 Apr 2015
Is the Dollar strength overdone? – MP
FXStreet (Barcelona) - Dean Popplewell, Director of Currency Analysis at MarketPulse, is of the view that some investors have raised a question regarding dollar’s strength, with the USD rising 28% against the EUR in the past 11 months, and further discusses about the expectations surround tomorrow’s NFP release.
Key Quotes
“The pace of the greenback’s rally has been the fastest in over 40-years. For some investors the danger is that the dollar’s move has been too rapid and could be overdone in the short-term. In 11-months, the USD has appreciated +28% versus the EUR. The one directional trade – short EUR positions, has certainly dominated.”
“For the first time in awhile dollar trading has been contained to relatively tight ranges across G10 currency pairs.”
“The world’s reserve currency of choice is looking to tomorrows Non-Farm Payroll report to provide the spark to allow the ‘buck’ to kick on and test new boundaries from here.”
“Softer U.S data of late, due to colder weather, could possibly have taken a modest bite out of NFP. The recent signs of weakness in the U.S economy have prompted some investors to push back their bets for the first interest rate hike in the U.S.”
“The Street consensus is looking at a headline gain of +242k vs. +294k with the unemployment rate to remain stable at +5.5%. The six-month average job increase has lingered just shy of +300k each month, certainly a headline gain that’s not sustainable.”
“A modest surprise should always be expected, but a disappointing report (close to +200k), especially around a holiday weekend, could make things rather messy for both dealers and investors.”
Key Quotes
“The pace of the greenback’s rally has been the fastest in over 40-years. For some investors the danger is that the dollar’s move has been too rapid and could be overdone in the short-term. In 11-months, the USD has appreciated +28% versus the EUR. The one directional trade – short EUR positions, has certainly dominated.”
“For the first time in awhile dollar trading has been contained to relatively tight ranges across G10 currency pairs.”
“The world’s reserve currency of choice is looking to tomorrows Non-Farm Payroll report to provide the spark to allow the ‘buck’ to kick on and test new boundaries from here.”
“Softer U.S data of late, due to colder weather, could possibly have taken a modest bite out of NFP. The recent signs of weakness in the U.S economy have prompted some investors to push back their bets for the first interest rate hike in the U.S.”
“The Street consensus is looking at a headline gain of +242k vs. +294k with the unemployment rate to remain stable at +5.5%. The six-month average job increase has lingered just shy of +300k each month, certainly a headline gain that’s not sustainable.”
“A modest surprise should always be expected, but a disappointing report (close to +200k), especially around a holiday weekend, could make things rather messy for both dealers and investors.”