US jobless claims fell to around a 44-year low last week, to 223k. The number was also below Thomson Reuter’s forecast of 243k, reflecting ongoing improvement in the jobs market. This led the market to believe that the Federal Reserve is inching one step closer to achieving full employment and inflation targets. 

Fed chairwoman Yellen will offer more clues on the economic outlook in Chicago tonight. Investors and economists believe, however, that the Fed has used up all of its ‘excuses’ for holding rates steady. The likelihood of a March rate hike, according to Bloomberg’s interest rate forecast, now stands at 90%. That means the market has almost fully prepared and priced in a 25bps raise in the Fed’s policy rate in two weeks’ time. 

The Dollar Index rallied for a fourth consecutive day to a two-month high in the 102.1 area. Technically, the trend indicator ‘SuperTrend’ has flipped upwards and the 10-Day Simple Moving Average line continues to trend upwards. The momentum indicator MACD formed a ‘golden cross’ earlier, continues to trend up, indicating that there could be more room to go.

PowerShares DB US Dollar Index Bullish Fund

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