US labor market: Will we see renewed USD strength?

Following the strong data yesterday (ADP and ISM) the ICE dollar index broke the 96 mark with ease. The appetite for USD longs is limited today as the official US labour market report is due for publication today. The FX market is more interested in the official report than in the ADP when considering the US labour market. 

US data is being discussed more intensively than volatility and the susceptibility to revisions would actually require. Economists call this "sunspot equilibrium".

The information content of the official labour market report is no doubt higher regarding the situation on the labour market than any sunspot counts. But the term describes the phenomenon well. 

The market might just as well agree on random indicators. Even if everyone was to realise that they are pointless it would not make sense for the individual market participant to deviate from market habits.

US economists are similarly optimistic for the US labour market report as they had been for yesterday's ADP. If they are correct again, the US currency is likely to find further support.

"Today's data is unlikely to provide a long term USD positive effect. It is likely to constitute another sunspot, although one that attracts a lot of attention", states Commerzbank.