The USD Dollar very marginally extended its gains for a fourth consecutive day on Thursday. It’s index against a basket of major currencies reached a 2-week high of 93.43 late in the London morning before closing in New York around 93.40. It was helped by a stock market which regained its losses of the last two sessions and by a decent set of weekly jobless claims figures ahead of Friday’s November labour market report.
Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 236,000 for the week ended Dec. 2, the Labor Department said. Data for the prior week was unrevised. It was the third straight weekly decline in claims and was the 144th straight week that claims remained below the 300,000 threshold. That is the longest such stretch since 1970, when the labour market was of course much smaller. According to a Reuters survey, non-farm payrolls probably increased by 200,000 in November after surging 261,000 in October.
Job growth in October was boosted by the return to work of thousands of employees, mostly in low-wage industries like hospitality and retail, who had been temporarily dislocated by Hurricanes Harvey and Irma. The unemployment rate is expected to remain steady at 4.1%. Markets usually approach the monthly US labour market report in a state of eager anticipation but it’s hard to see anything – however dramatic – shifting the Fed from a 25bp hike next week. More of the same hasn’t been a bad backdrop for the stock market in 2017 and equities need to advance less than 1% to be back at fresh all-time highs. The USD should continue to find support if stocks hold up.