US Dollar Rose as Upbeat Jobless Claims Enticed Traders Before Non-Farm Payrolls

US Dollar, Jobless Claims, Apple & Amazon Earnings – Asia Pacific Market Open:

• US Dollar pivots on Thursday after disappointing Wednesday
• Upbeat jobless claims data underscored data-dependent Fed
• Soft Apple & Amazon earnings may benefit DXY before NFPs

Asia-Pacific Market Briefing – US Dollar Gains on Jobless Claims Data

The US Dollar outperformed its major peers on Thursday, with the DXY Index gaining 0.56%. That was the best single-day performance in almost one month. It also marked a significant reversal from yesterday’s price action. On Wednesday, markets continued betting against the Federal Reserve despite Chair Jerome Powell showing few signs of wanting to cut rates this year.

The central bank continued to underscore that data will keep outlining the path for interest rates. With that in mind, the US Dollar’s ascent on Thursday began taking off around the time the latest initial jobless claims crossed the wires. Last week, applications for US unemployment benefits fell to 183k versus the 195k consensus. It also meant claims declined for the fourth time in five weeks.

After the data cross the wires, US Treasury yields climbed. However, before the data, bond rates were falling. This meant the 2-year Treasury yield ended relatively flat for the day. Unsurprisingly, the surge in the US Dollar spelled trouble for gold. The yellow metal sank 1.95%, which was the worst single-day drop since July 2020.

Then after the market close, disappointing earnings data crossed the wires from Apple and Amazon. This is painting a relatively sour tone for Friday’s Asia-Pacific trading session. The economic docket during this zone is also quiet. As such, we might see sentiment continue dipping. That may benefit the US Dollar as markets await Friday’s non-farm payrolls report.

US Dollar Technical Analysis

On the daily chart, DXY left behind a bullish Rising Sun candlestick pattern. Upside follow-through in the coming sessions could open the door to a turn higher. Such an outcome would place the focus on the 50-day Simple Moving Average (SMA). The latter may reinstate the downside focus. Immediate support is the 100.82 – 101.29 support zone.

DXY Daily Chart

Chart Created in TradingView

— Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com

To contact Daniel, follow him on Twitter:@ddubrovskyFX