FX.co ★ Jobless claims data can signal the Fed not to raise rates

The released US jobless claims data for last week showed an increase to 200,000 instead of the expected 182,000 decline. Also negative was the news of a revision with the previous week's claims up to 181,000.Although the reported jobless claims figures do not show the full picture of the labour market, the dynamics of rising claims after a period of decline from the end of January up to and including April could signal the not so good state of the labour market in the US. Powell said this yesterday at a press conference after the central bank meeting.How might the Fed's rate decision be affected by weakening positive labour market momentum?ADP employment figures showed a marked fall in new jobs in April. The latest jobless claims data along with a possibly weak April jobs reading from the US Department of Labor might send a strong signal to the Fed not to raise rates even by 0.25% to 1.25% in June but to limit it to the start of a $9 trillion government bond sell-off in the hope that it is the withdrawal of large amounts of liquidity that will help tame the galloping inflation in the country.If this scenario materializes, we could see a recovery in demand for equities, goods and commodities. In this case, the dollar on the ICE could fall below the 100.00 point level.