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Global economic growth fears had traders rushing into the Greenback early in the week for a safe haven, but the uncertainty faded later on positive U.S.-China trade headlines and arguably net positive U.S. employment data to push the U.S. dollar as a net loser by the end of Friday trade.
United States Headlines and Economic data
Monday:
- Chicago Business Barometer Slipped To 47.1 In September vs. 50.4 in August
- Federal Reserve Bank of Dallas Manufacutring outlook survey shows expansion continues in Texas region
- McConnell: ‘I would have no choice but to take it up’ if House votes to impeach Trump
- Fears of an escalating trade war had traders on a “risk-off” tilt to start the week, which is possibly the catalyst for why the Greenback started off positive against most of the majors while relatively weak again the Japanese yen.
Tuesday:
- Global risk aversion kicked into high gear, likely on a combination of rising risks from the global manufacturing sector (Operating conditions at ASEAN manufacturing firms deteriorated for the fourth consecutive month in September) to drive more traders into the Greenback during the Asia trading session. USD sentiment reversed quickly, though, after the latest data showed US manufacturing contracts to worst level in a decade.
- ISM Manufacturing PMI for September shows contraction at a faster pace than August (47.8 vs. 49.1 previous)
Wednesday:
- Another round of risk aversion sentiment hits the markets during the Wednesday session, likely on a combination of U.S. geopolitical risks (Trump impeachment probe gains steam with briefing, depositions) and Asian geopolitical risk (North Korean projectile lands in Japan’s exclusive economic zone, Tokyo says), and new trade war risks (US to impose tariffs on EU aircraft and agricultural products), all on top of the global growth slowdown fears from earlier in the week. This is likely the driver for why we saw USD higher during the morning London session.
- But USD sentiment shifted once again quickly after the latest ADP survey showed U.S. private payrolls growth slows in September
- Fed’s Williams says outlook for U.S. economy ‘mixed’
Thursday:
- U.S. Services survey shows economy is weaker than expected amid slowdown fears
- 2019 September Challenger Report: Announcements Fall 22% From August
- Chicago Fed’s Evans says he’s worried about inflation outlook, open minded on more rate cuts
- Fed’s Mester: Running a ‘hot’ economy risks faster automation
- U.S. factory orders down slightly in August
- Fed’s Clarida says central bank will set policy meeting by meeting
- Risk of recession isn’t high as long as Fed gets policy right, Clarida says
- Trump’s comments that Chinese delegation coming to U.S. next week for trade talks and expectations increasing of a Fed rate cut were likely contributors to USD’s weakness on the session.
Friday:
- September unemployment rate falls to 3.5%, a 50-year low, as payrolls rise by 136,000 – this was a mixed report on the U.S.’ employment situation as while the U.S. is seeing record unemployment conditions, wages were flat after a 0.4% rise in August, and the net jobs gain was below expectations and the previous read.
- U.S. trade deficit rises in August
