Rates as of 0500 GMT
Market Recap
Proof that good news for the US economy is not necessarily good news for the dollar the closely watched US Institute of Supply Management ISM manufacturing purchasing managers index PMI blew out estimates, rising to 64.7 from an alreadyhigh 60.8. This was the highest since 69.9 in December 1983. Yet the dollar declined on the day.
On the other hand, it couldve been the disappointing initial jobless claims figure, which rose by 61k to 719k instead of falling by 9k to 675k as expected. Pardon the disarray in the labels in the graph below, but there seems to be no good way that I could figure out to get them aligned properly.
Yet looking at the graph of EURUSD, the pair actually fell slightly immediately following the jobless claims number i.e., USD strengthened. It was also falling before the ISM figure came out but got a big boost upwards i.e, USD weakening when it was released. In other words, the key here seems to be riskon and riskoff rather than good or bad for the US economy.
Accordingly, the three worstperforming currencies were the three safehavens, USD, JPY CHF, while the bestperformers were the three commodity currencies NZD, AUD, and CAD.
The US stock market certainly took the message to heart, with both the SP 500 and the NASDAQ gaining sharply 1.2 and 1.8, respectively. The SP 500 broke through the magic 4,000 level for the first time to close above that previously unimaginable level. The NASDAQ is still 4.4 below…