USD Index Futures Waver on Strong UK Jobs Data

December 1, 2016 4:59AM CST

The U.S. dollar index is slightly lower in Thursday mid-day commodities trading, mainly due to better- than-expected economic reports in the Eurozone and despite a number of mixed reports in the U.S. However, in the longer U.S. dollar index futures will be boosted by prospects of higher interest rates from the U.S. central bank if strong data continues to roll in.

The December contract in U.S. dollar index futures was last .18 percent lower at 101.36, with the March contract down .17 percent at 101.27. Analysts say to expect the U.S. dollar to remain firm in advance of the December 13-14 FOMC policy meeting.

Overseas, unemployment in the Eurozone hit a seven-year low in October, according to official data from Eurostat published Thursday. The seasonally-adjusted unemployment rate in the Euro area was 9.8 percent in October 2016, beating analysts’ forecasts of 10 percent. The unemployment rate in the euro zone peaked at 12.1 percent between April and June 2013. Eurozone inflation in November came in as expected, up .6 percent.

Back in the U.S., commodities futures markets participants saw the Institute for Supply Management Purchasing Managers' index hit 53.2 in November, up from 51.9 in October. Economists expected the reading to be 52.2 for November, though any number above 50 indicates expansion in the manufacturing sector and a reading below 50 indicates contraction.

October Construction Spending grew 0.5 percent in October to $1.173 trillion, in line with expectations and the highest since March 2016, according to the U.S. Conference Board.

Weekly Jobless Claims increased 17,000 to a seasonally adjusted 268,000 for the week ended Nov. 26, the Labor Department said on Thursday. It was the highest level since June. Economists had forecast first-time applications for jobless benefits rising to 253,000.

Auto and Truck Sales for the month of November will be released this afternoon.

Most commodities futures markets anticipate a rate hike from Federal Open Market Committee at its upcoming policy meeting. The probability that the Federal Open Market Committee will increase the fed funds rate at the December 13-14 meeting is 99 percent, according to some analysts’ calculations, which compares to 94 percent on Wednesday and 68 percent at the beginning of November.

Friday’s November Employment report in the U.S. will add to speculation in the commodities futures markets regarding the Fed’s next move.

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