The USD has firmed against its major counterparts as tomorrow’s key data and all important Yellen speech approaches and market participants begin to hedge their positions in anticipation. Today’s data will see significant volatility as the Fed has stated countless times that it remains sensitive to economic data as a guidance for further action. Should we see better than expected Durable goods orders, implying that an uptick in manufacturing can be expected, we would see the USD gain across the board whereas worse than expected data would see the USD slump yet again as markets feel comfortable with their recent discounting of the USD. The same can be said for the Unemployment Claims Figure, which if better than expected, we would see the USD appreciate vis a vis its counterparts as markets have no choice but to price in the improvement of the labour market, while worse than expected data will see the USD depreciate.

Today’s key economic data:

EUR

  • German Ifo Business Climate expected at 108.5

USD

  • Core Durable Goods Orders m/m expected at 0.4%
  • Unemployment Claims expected at 265k
  • Durable Goods Orders m/m expected at 3.4%