Several reports signaled signs of weakness in the US economy, including data on jobless claims, industrial production, and manufacturing production.
The greenback had squirmed after the release of mediocre retail sales data yesterday. However, the US Dollar Index (DXY) fell again in Thursday's New York session trading (16/November) to the 104.10s range. The market is busy speculating on the prospects of a Fed rate cut next year.
Several reports released today signaled signs of weakness in the US economy. Among them are data on jobless claims, industrial production, and manufacturing production.
The number of jobless claims swelled from 218k to 231k in the week ending November 11, 2023. The previous consensus only expected an increase in claims to 220k.
US industrial production recorded -0.6% (month-over-month) in October 2023, or twice as bad as the estimate pegged at -0.3%. Manufacturing production even collapsed to -0.7% in the same period. Yet both data still posted growth of 0.1% and 0.2% in September.
"We're seeing the dollar trading weaker against other currencies today, as retail sales are dampening hopes that, potentially, we could see a rate cut sooner," said Susannah Steeter, strategist at Hargreaves Lansdown, "Session after session, sentiment is fluctuating on this. The Fed says it's data-driven, so that's what's moving the market specifically."
Market participants still believe that the Fed will not raise interest rates again in this cycle. Meanwhile, speculation about the moment of the first interest rate cut is increasingly being discussed. CME's FedWatch now shows a 1/4 chance of a Fed rate cut in March 2024, down slightly from yesterday's 1/3 chance.
Various majors fluctuated mixed within limited ranges. AUD/USD and NZD/USD lost around 0.25%. EUR/USD and GBP/USD climbed 0.4% and 0.3%, respectively. Meanwhile, USD/JPY continues to go up and down within the range that has been formed since the beginning of the week.