- U.S. flash services PMI down from 54.6 to 53.4 vs. 55.2 forecast
- Fed head Yellen: Jobs growth strongest in a decade
- Yellen: Wage growth picking up, raising most living standards
- Australia CB leading index down 0.4% vs. previous 0.5% gain
- New Zealand food price index down 0.1% in Nov
The U.S. dollar sprang back to life after Fed Chairperson Yellen highlighted labor market improvements in her recent testimony, even as U.S. data disappointed.
Fed head Yellen’s testimony – The U.S. central bank’s head honcho still had a few upbeat remarks left to share, even after the FOMC statement last week already turned out more hawkish than expected.
In her speech about the state of the labor market at the University of Baltimore’s Midyear Commencement, Yellen boasted that jobs growth is at its strongest in a decade. She mentioned that wage growth has been picking up and has been raising most living standards, although she did say that challenges still remain. She also noted that weekly earnings for younger workers have been rising but expressed some concern about how those without college degrees falling behind.
Equities shrug off weak data – The only piece of economic data printed during the New York session yesterday was the U.S. flash services PMI, which came in below expectations by falling from 54.6 to 53.4 instead of rising to 55.2. Components of the report indicated that the decline was mostly due to slower business activity growth even as job creation picked up.
Still, Wall Street managed to post decent gains for the day, with the Dow 30 index up 39.65 points to 19,883.06 (+0.20%), the S&P 500 index up 4.46 points to 2,262.53 (+0.20%), and the Nasdaq higher by 20.28 points to 5,457.44 (+0.37%).
Major Market Movers:
USD – Dollar domination was back on the table, thanks to a positive assessment of the U.S. labor market from the Fed head herself.
EUR/USD dropped from 1.0443 to its recent lows near the 1.0400 handle, GBP/USD turned from 1.2460 then dipped below the 1.2400 mark, AUD/USD is down from .7290 to .7250, and USD/CAD popped back up to the 1.3400 area.
- 12:30 am GMT: RBA policy meeting minutes
- Tentative: BOJ monetary policy decision (See Forex Gump’s preview here!)
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