USD Eyes US CPI, Contrarian Indicator Signaling a Bottom?
USD FUNDAMENTAL HIGHLIGHTS:
- USD Bulls Given NFP Reality Check
- US CPI and ECB Decision In Focus
- Demise of Dollar Indicator May Prompt Short Term Bottom
USD Bulls Given NFP Reality Check
After the US Dollar’s wheel merry go round following the ADP and NFP releases, the greenback is more or less closing the week where we started. The latest NFP figures had been a mixed bag and while disappointing expectations on the headline, the real disappointment stemmed from the miss relative to the ADP report, which saw USD bulls get ahead of themselves (Chart 1) on an indicator that hasn’t had the best of records in recent times in predicting the NFP report. That being said, the report provided a sweet spot for risk sentiment as it alleviates the pressure that the Fed may have to consider tapering sooner rather than later.
NFP Disappoints USD Bulls