Commodity Currencies Gain Against Greenback on Positive US Figures

US jobless claims fell to 391K, the lowest level since April. This is far better than 420K that was expected. GDP for the second quarter was revised to the upside – 1.3% (annualized). A revision from 1% to 1.2% was expected.

These figures, and especially the unemployment claims, show that the recession might not be so close. The reaction is a risk appetite rally, which means a weaker dollar against the Canadian, Australian and New Zealand dollars.

USD/CAD is down from around 1.03 to 1.0260. AUD/USD is up from 0.9835 to 0.9875. NZD/USD is up above 0.78 once again at 0.7824.

Also the pound is on the rise, but moving slower. EUR/USD is almost unchanged, as European issues dominate this pair.

Two simultaneous good figures from the US? This has become a rare event, but today we got it. Perhaps we will a nice gain in jobs in next week’s Non-Farm Payrolls, or at least we’ll see the unemployment rate ticking down.

It’s important to note that the drop under the round number of 400K also has an effect. Weekly claims were printing between 400K to 430K in recent months.

The issue of QE3 is currently off the table in the US following Bernanke’s rate decision, so the better figures have less of an impact on the chances of QE (direct correlation with the dollar).

What we do have now is a “risk environment” which was partially triggered by Bernanke’s twist but also “thanks” to the deepening debt crisis. Until the clouds are cleared, we are likely to see the dollar rise against commodity currencies when weak US figures are released, and a weaker dollar on positive figures, as seen now.

We have another significant US figure next, at 14:00 – Pending Home Sales. See how to trade this event with EUR/USD.