The US Dollar (USD) continued to slide, pressured by a jump in initial jobless claims to 236k—the largest weekly rise since March 2020—and lingering softness in the labor market, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Market eyes November NFP and CPI for direction
"USD extended its decline, alongside the slippage in UST yields. Initial jobless claims rose by 44k to +236k, the biggest weekly increase since Mar-2020. While weekly data can be especially 'noisy' around holiday season (Thanksgiving, Christmas), the 4-week moving average did tick higher last week."
"This adds to the soft labour market narrative, where not only job creation is slowing but layoffs continue to pick up. Nov NFP and CPI reports to be released next week on 16 and 18 Dec, respectively will be closely scrutinised."
"A softer set of data should give USD bears further courage to test lower while Dec seasonality trend sets a favourable environment for USD bears. Since 2000, the month of December is weakest (average -1.07%) amongst the twelve calendar months and DXY fell on 17 out of 25 Decembers."
