The dollar got a big jolt higher after the
much better than forecast U.S. jobs report, where NFP rose 255k, and
hourly earnings and the average workweek beat forecasts as well. The
wider than expected June trade deficit was relegated to the back seat.
EUR-USD slid from near 1.1160 highs to a low of 1.1048, before
recovering to 1.1102 on pre-weekend short covering. USD-JPY meanwhile,
ramped up to 102.06 highs, from lows near 101.00. Cable printed near
one-month lows of 1.3022, after topping at 1.3175 ahead of the open.
USD-CAD shot up to 1.3200 from 1.3015 as the CAD took a double-whammy
hit on the strong U.S. jobs report, and very weak Canada employment
data.
[EUR, USD]
EUR-USD fell after the much better than expected NFP outcome, and upwardly revised May and June figures. The wider than forecast trade deficit was an afterthought to the markets. The pairing dropped from 1.1155 to 1.1101 lows initially, later finding support under 1.1050, which was a eight-session base. The pairing printed 1.1046 before bouncing to over 1.1100. Pre-weekend short covering was behind the modest rally, and traders will watch the 20-day moving average, currently sitting at 1.1075 for future guidance. A N.Y. close under the level will be taken as a bearish signal. Meanwhile the 50-day moving average at 1.1154 was breached briefly ahead of the jobs data, though remains a solid resistance region.
[USD, JPY]
USD-JPY rallied to four-session highs of 102.06 from overnight lows of 100.89. The move came on the back of the much better U.S. jobs report, and resulting risk-on conditions. Today's rally however, did not even come close to undoing the damage done by last Friday's weak U.S. GDP data, or Japan's disappointing fiscal stimulus package. USD-JPY's 20-day moving average currently sits at 104.20, better than 200 points away. The dollar in general will need rally further, while risk appetite will need to remain elevated if further significant USD-JPY gains are to be seen.
[GBP, USD]
Cable closed out in London at 24-day lows, finishing below 1.3108 to achieve this, and posting a bottom of 1.3022. The weakness in the pairing concomitantly come with the 10-year Gilt over U.S. T-note yield spread widening to over -90 bp today from -84 bp yesterday. The BoE's bazooka easing, and promises of more stimulus "... at one of the MPC's forthcoming meetings" has kept the pressure on the pound. A survey sponsored by the UK's Recruitment and Employment Confederation found UK jobs market "suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009."
[USD, CHF]
SNB forex reserves hit another record high of CHF 615 bln in July data, suggesting that the central bank has been upholding its promise of June 24, the day after the Brexit vote, to "remain active in that market" after confirming it had intervened in the currency market, selling francs to buy euros. As the Economist's Big Mac index attests to, the franc is chronically and significantly overvalued by purchasing parity measures. The central bank stated on June 24 that it wanted to "stabilise the situation" after EUR-CHF dove sharply as news of the Brexit vote hit the headlines. Central bank president Jorden said last Monday that the SNB is "monitoring" fallout from the UK's decision to quit the EU "very carefully," and that franc strength is a "big concern for us." He also said that "we still can go lower if necessary" with regard to the prevailing deposit rate of -0.75%. After logging a one-year low at 1.0623 on June 24, EUR-CHF has settled over the last month to an orbit around 1.0800 - 1.0900 - evidently with the helping hand of the SNB.
[USD, CAD]
USD-CAD was the biggest mover following the jobs data, ramping up to 1.3151 highs from 1.3020 into the numbers. The combination of a very strong U.S. report and a very weak Canadian report weighed heavily on the CAD. Position squaring in anticipation of an improved Canada jobs picture, along with firmer oil prices weighed on USD-CAD on Thursday, though those moves now have been undone, and then some, as the pairing later printed 1.3200, leaving the pairing at eight-session highs.
[EUR, USD]
EUR-USD fell after the much better than expected NFP outcome, and upwardly revised May and June figures. The wider than forecast trade deficit was an afterthought to the markets. The pairing dropped from 1.1155 to 1.1101 lows initially, later finding support under 1.1050, which was a eight-session base. The pairing printed 1.1046 before bouncing to over 1.1100. Pre-weekend short covering was behind the modest rally, and traders will watch the 20-day moving average, currently sitting at 1.1075 for future guidance. A N.Y. close under the level will be taken as a bearish signal. Meanwhile the 50-day moving average at 1.1154 was breached briefly ahead of the jobs data, though remains a solid resistance region.
[USD, JPY]
USD-JPY rallied to four-session highs of 102.06 from overnight lows of 100.89. The move came on the back of the much better U.S. jobs report, and resulting risk-on conditions. Today's rally however, did not even come close to undoing the damage done by last Friday's weak U.S. GDP data, or Japan's disappointing fiscal stimulus package. USD-JPY's 20-day moving average currently sits at 104.20, better than 200 points away. The dollar in general will need rally further, while risk appetite will need to remain elevated if further significant USD-JPY gains are to be seen.
[GBP, USD]
Cable closed out in London at 24-day lows, finishing below 1.3108 to achieve this, and posting a bottom of 1.3022. The weakness in the pairing concomitantly come with the 10-year Gilt over U.S. T-note yield spread widening to over -90 bp today from -84 bp yesterday. The BoE's bazooka easing, and promises of more stimulus "... at one of the MPC's forthcoming meetings" has kept the pressure on the pound. A survey sponsored by the UK's Recruitment and Employment Confederation found UK jobs market "suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009."
[USD, CHF]
SNB forex reserves hit another record high of CHF 615 bln in July data, suggesting that the central bank has been upholding its promise of June 24, the day after the Brexit vote, to "remain active in that market" after confirming it had intervened in the currency market, selling francs to buy euros. As the Economist's Big Mac index attests to, the franc is chronically and significantly overvalued by purchasing parity measures. The central bank stated on June 24 that it wanted to "stabilise the situation" after EUR-CHF dove sharply as news of the Brexit vote hit the headlines. Central bank president Jorden said last Monday that the SNB is "monitoring" fallout from the UK's decision to quit the EU "very carefully," and that franc strength is a "big concern for us." He also said that "we still can go lower if necessary" with regard to the prevailing deposit rate of -0.75%. After logging a one-year low at 1.0623 on June 24, EUR-CHF has settled over the last month to an orbit around 1.0800 - 1.0900 - evidently with the helping hand of the SNB.
[USD, CAD]
USD-CAD was the biggest mover following the jobs data, ramping up to 1.3151 highs from 1.3020 into the numbers. The combination of a very strong U.S. report and a very weak Canadian report weighed heavily on the CAD. Position squaring in anticipation of an improved Canada jobs picture, along with firmer oil prices weighed on USD-CAD on Thursday, though those moves now have been undone, and then some, as the pairing later printed 1.3200, leaving the pairing at eight-session highs.
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