Mixed US NFP Report Has Little Impact on the Dollar

Market Reviews

The US dollar remains firm, despite mixed employment report. The British pound is the strongest one for today, followed by the dollar. Japanese yen is the third strongest one on risk aversion. New Zealand dollar is the weakest one, followed by Swiss franc and Australian dollar.

The pound is lifted by news that EU’s Brexit negotiating team told EU diplomats that a deal is “very close”. And, both sides are working closely for the summit on October 17-18 first, and then the final one on November 17-18. The EU chief negotiator Michel Barnier will present to European Commission a first draft of the “Outline of new partnership with UK” on October 10. That’s for the trade relationship with UK after Brexit.

US non-farm payrolls number missed expectation and rose only 134k in September versus consensus of 188k. US unemployment rate dropped to 3.7% in September, down from 3.9% and beat expectation of 3.8%. That’s the lowest level in 49 years. Participation rate was unchanged 62.7%. Average hourly earnings rose 0.3% mom, matched expectations. Also from US, trade deficit widened to USD -53.2B in August.

Economic data from Canada showed, that employment grew 63.3k in September, above expectation of 32.5k. Unemployment rate fell to 5.9%, down from 6.0%. Trade balance showed CAD 0.5B surplus versus expectation of CAD -1.4B deficit.

Today’s data also showed, that Germany factory orders rose 2.0% mom in August versus expectation of 0.7% mom. German PPI increased to 3.1% yoy versus expectation of 2.9% yoy.