The much-anticipated June NFP numbers beat expectations sending the dollar lower in morning trading

The much-anticipated June NFP numbers beat expectations sending the dollar lower in morning trading

Financial markets are reacting to better than expected Non-Farm Payroll numbers with equities poised for new record high and a weaker dollar. US Treasury yields fell after the jobs report helping to weaken the dollar. Also, speculative positions are clouding the price action across markets as many traders unwind positions before the long weekend. Canadian dollar strengthens as the price of oil remains high. Expect volatility to remain high through much of FX trading today.

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  • FX Rates
    July 2, 2021

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    The dollar spot indices are showing a weaker dollar after the jobs data for June. 

    Non-Farm Payrolls came in at +850K which was significantly better than the +720K expected. Prior month was also revised up to 583K. Surprisingly, the headline unemployment rate increased to 5.9% from 5.8%. Hedge fund and other leveraged speculators had made bets the dollar would rally regardless of the actual job numbers. Those wagers seem to be unwinding this morning.

    GBP

    The pound is flat despite losing ground to the greenback in the past six trading days. Delta variant Covid case increases in the UK have put the reopening of the UK economy in doubt. 

    EUR

    After initially gaining on the dollar, the euro is flat as we write. Bullish dollar positions are being unwound after the US jobs report.

    Overnight, Christine Lagarde said she believes inflation will steady below their target in the medium term, after climbing to 2% this year, it will fall to 1.5% in 2022 and 1.4% in 2023. The euro has retraced slightly down 0.27% since yesterday’s high.

    CAD

    The Canadian dollar is stronger today on overall dollar weakness. Trading is volatile as the price of oil fluctuates.

    WTI Crude oil trades near the highest level since 2018, around $75. OPEC+ supply increase of 400,000 bpd now in doubt with focus turning to next month’s OPEC meeting.

    ASIA/PACIFIC

    The Japanese yen is stronger but holding above the 111 level. Lower US Treasury yields likely to reduce dollar-buying/yen-selling from Japanese investors.

    The Chinese renminbi strengthened on overall dollar weakness. The communist party in China is celebrating its 100th anniversary and monetary authorities are keen to keep the yuan steady going into the weekend.

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Peter Compton
WRITTEN BY
Peter Compton

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