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Last Wednesday (December 24th) evening, the employment data released by the US brought quite a few surprises to the pre-holiday market.
As of the week ending December 20th, the number of initial unemployment claims in the US dropped to 214,000 — this figure not only fell below the previous week's 224,000 but also defied market expectations. Originally, everyone anticipated 224,000, but the slightly warmer-than-expected data directly appeared.
Why is this important? Initial unemployment claims are a thermometer for the US labor market. The lower the number, the less employment pressure there is, and the more confidence the market has in employment resilience.
After the data was released, the market's reaction was straightforward — the US dollar gained positive momentum. The logic is clear: a stable employment market → increased confidence in economic fundamentals → support for the US dollar. For traders, this causal chain is all too familiar.
With the Christmas holiday approaching, this slightly better-than-expected data indeed eased concerns about high interest rates impacting employment. The market neither fell into the previous cooling panic nor experienced extreme emotional swings caused by large data fluctuations. For many investors, this steady yet slightly rising micro data can be considered a rare calming factor at the end of the year.