USD Rose on Strong Jobs Report, Pound Boosted by Brexit News

Market Reviews

The British pound rose sharply after the EU chief negotiator Michel Barnier noted that to reach an agreement it is important to resolve the issue with the Irish border. Michel Barnier at the UK House of Commons mentioned that EU is “open to discussing other backstops” regarding the Irish border, as a trigger. The British currency is trading as the strongest one.

The US dollar is lifted by jobs data. The US Labor Department reported, that nonfarm payrolls (NFP) rose by 201.000 in August, higher than the consensus estimate for the creation of 191.000 jobs. Average hourly earnings increased by 0.4% month-on-month in August, above expectations for a 0.3% growth. On an annualized basis, wage inflation grew 2.9% in August. Economists had projected the indicator to remain unchanged at 2.7%. Meanwhile, unemployment rate unexpectedly held steady at 3.9%. Analysts had expected the jobless rate to decrease to 3.8%.

The euro fell against the dollar after the release of weak German data on industrial production and trade balance, as well as a report on the euro area's GDP. Eurozone GDP was finalized at 0.4% qoq in Q2. Germany trade surplus narrowed to EUR 15.8B in July. German industrial production fell by 1.1% mom in July.

Canadian employment report was disappointing. Canada’s employment market has lost 51.6k jobs in August, nearly undoing all the 54.1k growth in July. That’s also below expectation of 5.1k growth. Unemployment rate also rose to 6.0%, up from 5.8% and higher than expectation of 5.9%.