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The market saw through the distortion of employment data, and the U.S. dollar index faced a cruel game today!
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Hello everyone, today XM Forex will bring you "[XM Forex Platform]: The market sees through the distortion of employment data, and the US dollar index faces a cruel game today!". Hope this helps you! The original content is as follows:
Thursday, December 11. The U.S. dollar index is trading above 98.30 during the current North American session; the newly released U.S. initial jobless claims and trade account data have become the focus. The former shows short-term fluctuations in the labor market, while the latter reveals positive signals of improvement in the external sector. Together, these data form an important part of the current US dollar pricing logic and prompt traders to re-examine whether the US dollar has the basis for further upside.
The latest number of people filing for unemployment benefits in the United States was 236,000, higher than market expectations of 220,000, and a significant rebound from the previous figure of 192,000. The rebound was widely interpreted as a correction from the previous week's unusually low levels, which had been understated due to distortions in seasonally adjusted models caused by the Thanksgiving holiday. Despite the increase in data that week, the number of people continuing to apply for unemployment benefits unexpectedly fell to 1.838 million, a new low since mid-April and well below expectations of 1.95 million. This departure reflects that the internal structure of the labor market remains resilient and that the rate of employees exiting the unemployment system has not slowed down. Although the single-week data is subject to greater technical disturbances, the overall trend shows that the U.S. job market has yet to show signs of systemic loosening. At the same time, the trade deficit narrowed to US$52.8 billion in September, the lowest level since June 2020, significantly better than the US$63.3 billion expected. Exports increased by 3% month-on-month to US$289.3 billion, a five-month high, mainly benefiting from the strong growth in exports of non-monetary gold and pharmaceutical preparations; imports only rose slightly by 0.6% to US$342.1 billion, with growth slowing down significantly. This www.xmtraders.combination shows that external demand hasThe drag on China's economic growth is reducing, and pressure on the current account has eased, providing potential support for the US dollar.
It is worth noting that although the trade situation has improved significantly in a single month, the cumulative trade deficit in the first nine months of this year expanded by US$112.6 billion year-on-year, an increase of 17.2%, indicating that imports are still growing faster than exports, and the situation of relatively strong domestic demand has not fundamentally changed. This somewhat dampened the optimism brought about by the trade data. In addition, the significant increase in pharmaceutical preparations and non-monetary gold in the import structure partly reflects the restructuring of global supply chains and changes in safe-haven asset allocation, rather than purely cooling consumer demand. Therefore, whether the data can continue to improve remains to be seen. Judging from the exchange rate reaction, the U.S. dollar index did not make a strong breakthrough after the data was released, but maintained a narrow range of fluctuations, indicating that the market is becoming cautious about the fundamental positioning of the current U.S. economy. Investors are more concerned about whether the relative attractiveness of U.S. dollar assets will weaken in the next few quarters as other global economies gradually stabilize.
Market Performance
Judging from the 5-minute K-line, the U.S. dollar index has been slowly falling from the high point near 98.6281. It formed a brief rebound at 98.5169 and then fell back again. It has just hit a new low of 98.3735. The overall price is still in a low and weak range. The MACD indicator is running below the zero axis, DIFF and DEA are both negative, and the column has narrowed slightly after amplifying in the early stage, reflecting the dominance of shorts but the downward momentum has been blunted. The RSI remains around 30, which is in the oversold zone, indicating that there is more short-term selling pressure and the price is less sensitive to new negative news. After the long negative K line at the end, a small entity with a lower shadow appears, indicating that there is some hedging power at the low level, but a clear reversal structure has not yet been formed in terms of form, and the short-term interpretation is still weak as a shock. If it can recover the rapid decline in the purple range in the future, it will be one of the important signals to observe the degree of sentiment recovery.
Taken together, the current logical main line of the US dollar trend is undergoing a transformation. Rapid interest rate hikes by the Federal Reserve over the past two years have helped the dollar strengthen, but now that interest rates have reached restrictive levels, further upside is limited. The market's focus has gradually shifted from "interest rate differential" to "growth differential" and "external balance". If the narrowing of the U.S. trade deficit can continue, it will strengthen the intrinsic value support of the U.S. dollar; while the labor market is experiencing short-term disturbances, it is still within a healthy range overall, providing the basis for a soft landing of consumption and the economy.

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