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The U.S. dollar found more reasons to advance against its rivals thanks to stronger than expected medium-tier reports. A bit of risk aversion also supported the safe-haven currency as Trump issued strong statements against North Korea.

  • U.S. JOLTS job openings up from 5.70M to 6.16M vs. 5.74M forecast
  • U.S. NFIB Small Business index improved from 103.6 to 105.2 in July
  • U.S. IBD/TIPP Economic Optimism index rose from 50.2 to 52.2 vs. 50.6 consensus
  • Trump: North Korea will be met with “fire and fury” on missile threats

Major Events/Reports

Upbeat medium-tier U.S. data

Dollar traders paid extra close attention to medium-tier releases as there were no major ones on deck yesterday.

In particular, the JOLTS jobs openings data was seen as one of the main catalysts for the dollar’s rally when the figure jumped from 5.70 million to 6.16 million in June, surpassing the 5.74 million consensus and hitting a record high.

Underlying data revealed that the growth was spurred by more opportunities in the professional and business services sector, with healthcare and construction following close behind. The hiring rate was mostly unchanged at 3.7%. The quits rate and layoffs and discharges rate were also little changed at 2.1% and 1.2%, respectively.

The NFIB Small Business index posted an impressive increase from 103.6 to 105.2 instead of holding steady as expected. Labor-related components also turned out positive, with 19% of firms reporting plans to create new jobs and 35% having more job openings they could not fill in the reporting period.

Lastly, the IBD/TIPP Economic Optimism index climbed from 50.2 to 52.2, higher than the estimated rise to 50.6 for the current month. This reflects a more positive outlook on personal finance and confidence in federal policies among consumers.

Risk-off on North Korea jitters?

Tensions between North Korea and the U.S. appear to be escalating as the hermit nation has threatened to strike Guam while Trump retaliated saying that these provocations will be met with “fire and fury.”

I can’t tell if this is a weak reference to A Song of Ice and Fire, but I wouldn’t be surprised if the Donald starts saying that “Winter is coming!” U.S. equity indices returned their previous day gains while stock futures are also in the red.

  • Dow 30 index is down 33.08 points to 22,085.34 (-0.15%)
  • S&P 500 index is down 5.99 points to 2,474.92 (-0.24%)
  • Nasdaq is down 13.31 points to 6,370.46 (-0.21%)

In a statement by North Korea’s state-run KCNA news agency, the Korean People’s Army is waiting for leader Kim Jong Un to give the green light after “carefully examining” plans for a missile strike on the nearby U.S. territory of Guam.

Major Market Mover(s):

USD

The dollar had a shaky start on geopolitical risks but decided to go for the northbound route upon seeing upbeat economic figures.

EUR/USD edged down from 1.1818 to a low of 1.1732, GBP/USD tumbled from 1.3032 to a low of 1.2952, USD/CHF is up to the .9750 area, and AUD/USD dropped to a low of .7881.

JPY

The only currency that refused to bend the knee against the Greenback was the lower-yielding yen, which also drew support from tensions with North Korea.

USD/JPY fell from a high of 110.79 to a low of 110.13, EUR/JPY edged down from 130.55 to a low of 129.35, GBP/JPY dropped below the 143.00 handle, and AUD/JPY is down to 86.83.

Watch Out For:

  • 1:30 am GMT: Australia’s Westpac consumer sentiment index (0.4% previous)
  • 2:30 am GMT: Australian home loans (1.5% expected, 1.0% previous)
  • 2:30 am GMT: Chinese CPI y/y (no change from previous 1.5% reading expected)
  • 2:30 am GMT: Chinese PPI y/y (5.6% expected, 5.5% previous)
  • 7:00 am GMT: Japanese preliminary machine tool orders y/y (31.1% previous)