Today’s rally may be a hint that market participants are starting to weigh up whether the market has been oversold in response to the woes of emerging-market currencies. There have been a few wobbles in macro data, notably with Monday’s ISM manufacturing index, but on balance US fundamentals look quite buoyant, even more so after taking stock of today’s improving jobless claims and healthy productivity data.
Jobless claims slid to 331,000 last week, improving by 20,000 from the week before, and comfortably better than forecast by analysts polled by Reuters beforehand, who had given a consensus estimate of 335,000. The definitive snapshot of the labour market will be available with tomorrow’s monthly government report, but today’s data will have brightened perceptions of how the jobs market is faring.
Fourth-quarter US productivity increased at an annualised pace of 3.2%, surpassing analyst predictions of 2.5%, and the previous quarter’s rate was amended higher to 3.6% from a previously announced level of 3.0%.
EUR/USD remains up on the day several hours after the ECB held off from introducing any additional stimulus measures. The euro had strengthened against most major currencies, gaining 0.43% against the dollar and 0.87% against the yen.