Yes, America Is Getting Back On Her Feet -

USD at Six Week Highs after Long Labor Day Holiday Weekend

Financial traders always circle the first Friday of the month on their calendars, as that is when the U.S. Bureau of Labor Statistics releases data on U.S. Non-farm payrolls. Economists are expecting the jobs picture to have shown modest improvement in August, with an estimated 180k jobs created. If true, this would be a slight gain from the 162k jobs created in July. Prior to the release of the payrolls report, traders will attempt to revise their estimates of the “official” government data by studying how the private sector workforce fared last month, when the monthly ADP private sector jobs report is released on Thursday.

Fundamentals

U.S. Dollar Index futures started the month of September with a “pop,” as traders returned for the Labor Day holiday in a bullish mood. The first catalyst for a higher “greenback” was the decision by President Barack Obama to seek congressional approval before any military action against Syria. This news removed some of the uncertainty that was present going into the long holiday weekend, as it postponed the chance of immediate U.S. action in the already volatile Middle East, especially with international support for U.S. involvement rather subdued. In addition, traders received some positive news on U.S. manufacturing, as the Institute for Supply Management’s manufacturing purchasing managers index rose to 55.7 in August, up from 55.4 in July. This increase was an even bigger surprise, as most analysts were expecting a lower reading (53.8 average estimate) last month. The index is now at its highest levels for 2013, and this was the third straight month of expansion for the U.S. manufacturing sector. Currency traders are in for a slew of U.S. economic reports the remainder of the holiday shortened trading week, with data on U.S. trade balance, jobless claims, factory orders and the ISM non-manufacturing Index all to be released prior to the always anticipated Non-farm Payrolls report for August. September may also be the beginning of a tapering of Bond purchases by the Federal Reserve in anticipation of improving economic conditions in the U.S. If that is the case, the U.S. will be the first of the major economic powers to begin to move away from very accommodative monetary policies, which could trigger a further move by traders into the U.S. Dollar, especially against the currencies of nations who continue to struggle with weak economies and will be forced to remain in an accommodative mode for the foreseeable future.