The US dollar is stable after data on US unemployment and industry, which confirm the December interest rate cut

The U.S. dollar is falling on Thursday after the Fed’s Williams said he sees inflation cooling and interest rates falling.
Investors note that unemployment claims data are getting weaker, although further comments from Fed officials are expected.
The US dollar index remains unchanged around 106.50 and is still looking for support from which it could bounce.

The U.S. dollar (USD) is flat at around 106.50 on Thursday, tracked by the DXY U.S. dollar index, after New York Fed President John Williams said inflation continues to fall, opening the door to further decline in interest rates. The US dollar has been trading sideways in recent days, affected by fluctuations related to the war between Russia and Ukraine and, most recently, disappointing Nvidia earnings.

The US economic calendar shows weekly jobless claims data on Thursday, and the Philadelphia Fed Manufacturing Survey for November came in below expectations. In the unemployment claims section, the number of continuing claims is starting to approach 2 million people. Meanwhile, Philadelphia manufacturing data for November fell, adding weight to the call for an interest rate cut in December.

Daily market update: US data continues to decline and deteriorate

New York Fed President John Willams made some dovish comments. Williams said inflation is heading down and interest rates should continue to fall.
Meanwhile, the Fed’s Williams received additional support from Richmond Fed President Tom Barkin, who said in an interview with the Financial Times on Thursday that inflation would continue to fall, according to Bloomberg.
On the geopolitical front, Ukraine reports that Russia has launched a ballistic missile, Bloomberg reports.
At 13:30 GMT, the weekly number of jobless claims for the week ending November 15 was 213,000, lower than the expected 220,000. The main problem, however, is the acute augment in the number of continuing claims, which saw the number of employed people rise to 1.908 million people compared to 1.872 million in last week.
The Philadelphia Fed Manufacturing Survey for November dropped to -5.5, well below the positive 8 and 10.3 recorded earlier.
Updated home sales data for October will be released at 15:00 GMT. Economists expect sales to rise to 3.93 million from 3.84 million in September.
A group of Fed speakers are scheduled to appear next Thursday:
- At approximately 1:45 p.m. GMT, Federal Reserve Bank of Cleveland President Beth Hammack delivers welcome remarks at the Fed’s 2024 Financial Stability Conference in Cleveland. Hammack will speak again at 17:30 GMT during the same event.
- At 17:25 GMT, Federal Reserve Bank of Chicago President Austan Goolsbee participates in a moderated question and answer session at an event hosted by the Central Indiana Corporate Partnership in Indianapolis.
- Federal Reserve Bank of Kansas City President Jeffrey Schmid delivers a speech on economic growth and monetary policy at an event hosted by the Fairfax Industrial Association in Kansas City at 17:40 GMT.
- Federal Reserve Vice Chairman for Supervision Michael Barr ends the session at 21:40 GMT by participating in a discussion on banks and artificial intelligence at the FinRegLab AI 2024 symposium in Washington.
Stocks are starting to feel positive amid prospects that a December rate cut could still happen. Meanwhile, Nvidia is recovering from Wednesday’s dismal results and sees all U.S. stocks heading into the green.
The CME FedWatch Tool estimates the next 25 basis point (bps) rate cut by the Fed at its December 18 meeting at 55.5%. The chance of leaving rates unchanged is 44.5%. While the interest rate cuts scenario is still the most likely, investors have significantly reduced their share of bets on interest rate cuts compared to a week ago, when the possibility of a rate cut was still 72%.
The U.S. benchmark rate for 10-year notes is 4.39%, moving away from a high printed on Friday of 4.50%.

US Dollar Index Technical Analysis: Difficult to Choose a Direction

The US Dollar Index (DXY) is supported by continued secure haven inflows amid escalating geopolitical tensions between Russia and Ukraine. Traders should keep in mind that if the recent escalation abates and the two sides enter into any ceasefire talks, the dollar could retreat.

After a brief test and decisive rejection last Thursday, the round level of 107.00 remains at the top of the game. A novel annual maximum of 107.07 has already been reached, which is a statistical level to be overcome. Higher, if the 107.35 level is broken, a novel two-year high may be reached.

The first negative level is 105.93, closed on November 12. A slightly lower key level of 105.53 (the highest from April 11) should avoid declines towards 104.00. If DXY drops all the way to 104.00, a large number and the 200-day straightforward moving average at 103.95 should catch any descending knife pattern.

US Dollar Index: Daily Chart