USD hit by jobs
The US dollar was sharply lower on Friday night after the US non-farm employment report missed forecasts for the second month running.
US jobs had been on strong run, beating expectations for 14 months in a row, but the pace of growth has recently slowed, albeit at a still-solid pace.
The July jobs report found 187k new jobs were added to the US economy – only just below the 200k expected.
That said, other indicators did manage to beat expectations, with the unemployment rate falling from 3.6% to 3.5%, while average hourly earnings were also stronger, up 4.0% in annual terms.
Aussie rebounds from support
The weaker headline jobs number scuppered a recent rally that saw the USD index climb 3.3% in less than three weeks. A rapid move higher in long-term bond yields – most notably in the benchmark 10-year bond yield – drove the US dollar higher.
With the USD’s reversal on Friday, most currencies managed to climb versus the greenback.
The euro was the best, with the EUR/USD up 0.6%, while the USD/JPY fell 0.5%.
In Asia, the USD was more mixed, with the USD/SGD down 0.1% but the USD/CNH slightly higher. The AUD/USD gained 0.3% as it rebounded from technical support near the nine-month lows, while the NZD/USD gained 0.4%.
US inflation in focus
The US dollar story is likely to dominate markets again this week with US inflation, due on Thursday night, the major economic event.
FX markets are looking for an increase in the July report with forecasts for an annual rate of 3.3% from 3.0% in the previous report.
The US market is unlikely to be too fazed by a small uplift – US inflation has tumbled over the 12 months.
USD lower after jobs report
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Calendar: 7 – 11 August
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