Solid Labor, Dollar Returns in Strength
The US Dollar Index strengthened in Thursday's trading, supported by more solid than expected United States employment data. DXY rose around 0.3% towards the 100.80 level after initial jobless claims fell to 208 thousand, lower than expectations of 217 thousand and previous data of 216 thousand.
Even so, the dollar's strengthening was still limited because US Retail Sales data slowed. Retail sales rose only 0.2% monthly in June, lower than the 1.0% increase in the previous period. This condition shows that the US economy is still quite strong, but the pace of consumption is starting to become more moderate.
The strengthening of the dollar puts pressure on a number of major currencies. EUR/USD fell towards 1.1440, while GBP/USD weakened to around 1.3470. USD/JPY rose to the 162.40 area as the yen was again pressured by dollar demand, although the risk of intervention from Japanese authorities still limited further gains.
AUD/USD also dropped below 0.7000 and hovered around 0.6995. Pressure on the Australian dollar emerged after Australian consumer inflation expectations fell to 4.7% in July from 5.5% previously, while strong US employment data helped support the greenback.
In the commodity market, WTI fell to US$79 per barrel or weakened by around 1.6% due to profit taking after the previous increase. However, supply risks from the Middle East are still a concern for the market. Meanwhile, gold fell sharply by nearly 2% to around US$3,982 as a strengthening dollar reduced interest in the non-yielding precious metal.
The impact on the market, the dollar received support from solid employment data, but room for strengthening still depends on the next economic data. On Friday, investors will pay attention to final Eurozone inflation, Housing Starts, Building Permits, Industrial Production and US University of Michigan Consumer Sentiment to read the next direction of the Fed's economy and policy.
Source: Newsmaker.id
