⛔️🚨 Let's explain and understand the important data coming out of America
⛔️ What are unemployment claims?
This is the number of people who applied for unemployment benefits for the first time during the past week. This indicator is released weekly and provides a quick glimpse into the state of the US labor market.
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🔍 Details of the numbers and analysis of unemployment claims rates:
Previous: 227 thousand claims
Estimate (expected): 233 thousand claims
Current (actual): 221 thousand claims
📊 Analysis:
When the actual number is lower than expected (as happened here: 221K instead of 233K), it means that fewer people lost their jobs.
This indicates that the labor market is strong, and there is stability in jobs, or even improvement.
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💵 Why is this positive for the US dollar?
1. Strong labor market = Strong economy
Investors see the strength of the labor market as a sign of overall economic strength.
2. Opportunity to raise or maintain interest rates at high levels
When the economy is strong and not suffering from unemployment, there is no pressure on the Federal Reserve to lower interest rates, and it may tend to keep rates high to combat inflation.
3. Raising or maintaining interest rates = Support for the strength of the dollar
Currencies that offer higher returns (higher interest) are more attractive to investors.
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✅ Summary 👀👀
Data is better than expected → Strong labor market → The Federal Reserve does not need to ease monetary policy → The dollar strengthens against other currencies 🔼🔼
