US “Jobs Friday” did not disappoint: Nonfarm Payrolls for October rose 531K, much better than expectations of 450K and September’s 312K (revised up from 194K); the unemployment rate fell to 4.6% from 4.7%; and the closely watched Labor Participation Rate held at 61.6% as expected. US equities and the dollar jumped on the news. US Treasury 10Yr yields are steady at 1.53%. The UK pound is soft as traders continue to digest the Bank of England’s failure yesterday to hike rates as expected. Gold and oil are steady at $1794 per oz. and $79.77 per barrel, respectively.
November 5, 2021
EUR/USD 1.1520 GBP/USD 1.3456 USD/CAD 1.2463 AUD/USD 0.7385 USD/JPY 113.63 USD/CNH 6.4038 USD/ILS 3.1116 USD/MXN 20.4720 USD/CHF 0.9158 USD/INR 74.4563 USD/BRL 5.5335 USD/SGD 1.3524 USD/DKK 6.4563 USD/SEK 8.5921 USD/NOK 8.5830
The dollar is broadly higher as the dollar index reached a fresh 14-month high in response to positive US labor data for October. Traders are also digesting the Fed’s tapering announcement, which was considered less hawkish than expected.GBP
The UK pound is still suffering from yesterday’s Bank of England decision not to hike interest rates, as the markets had expected. Traders await a full docket of UK economic data next week, including GDP 3Q, and Industrial Production, Government Spending, and the UK trade balance for September.EUR
The euro is lower following the bullish US payroll data. It was already lower in European trading after news that German COVID-19 cases rose by a record number for a second day, and Eurozone Retail Sales for September declined by 0.3%, worse than +0.2% expected and +0.3% in August.CAD
The Canadian dollar is slightly stronger on the day, despite strong US jobs data and weak equivalent Canadian jobs data. Canada’s October employment rose by 31.2K, less than 41.6K expected and September’s 157.1K. Unemployment was at 6.7% and Participate Rate at 65.3%, both only very slightly better than expected.ASIA/PACIFIC
The Japanese yen is slightly stronger. At 113.60, the USD/JPY is trading near the lower end of the 113.50-114.50 range in place over the last few weeks. Following a big decline in COVID-19 cases, Japan ended several social restrictions, including business travelers and foreign laborers entering Japan.
The Australian dollar moved little following the Monetary Statement of the Reserve Bank, which kept with its message that inflation will not lead to a rate hike before 2024. The bank said it estimates this year’s GDP at 3% and a stronger 5.5% in 2022.
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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