The much-anticipated jobs data showed a gain of 199K jobs in December vs. the 450K expected. Also, December data for wages came in higher than expected leading to inflation concerns which, in turn, caused Treasury rates to jump. The US 10yr is now yielding 1.74% and is close to the highs of last March. Higher rates could not help the dollar, however.
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EUR/USD 1.1328 GBP/USD 1.3561 USD/CAD 1.2690 AUD/USD 0.7169 USD/JPY 115.71 USD/CNH 6.3861 USD/ILS 3.1090 USD/MXN 20.3866 USD/CHF 0.9213 USD/INR 74.3075 USD/BRL 5.6537 USD/SGD 1.3581 USD/DKK 6.5657 USD/SEK 9.0763 USD/NOK 8.8511
US Nonfarm Payrolls for December came in at +199K vs. expectations of +450K. The prior two months had a net revision of +141K with November now at +249K. The Unemployment rate fell to 3.9% from 4.2% in November. Inflation showed up in the Average Hourly wage data for December which grew 4.7% on an annual basis vs. 4.2%. The prior month's wage data was revised upward to 5.1% gain.GBP
The British pound continued to gain. Since December 20, cable has picked up 2.75%. FX markets were relieved overnight that UK December Construction PMI fell only slightly and still indicates expansion. Omicron was feared to have hit the UK economy but the PMI data suggested otherwise.EUR
The euro gained overnight after December consumer prices showed an increase of 5% leading FX markets to think the European Central Bank may be forced to remove some monetary policy accommodation sooner than planned.CAD
Higher oil prices help strengthen the Canadian dollar. The price of oil is set for a third consecutive week of gains and sits at over $80/bbl. The violent crackdown on demonstrators in Kazakhstan by the Russian-backed authoritarian regime has led to concerns about oil supply as the global economy accelerates.ASIA/PACIFIC
The Chinese renminbi gained on the dollar overnight after December data on foreign currency reserves showed the highest levels since 2015.
For more analysis on FX markets or information regarding SVB's FX services:
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory
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