Weak US jobs data extends dollar decline
This morning’s much anticipated release of US jobs data for August showed the smallest jobs gain in seven months. A 235K increase in Nonfarm Payrolls (NFP) followed July’s revised increase of 1.05 million, but was much less than expectations of 750K. The immediate reaction in the FX market was a 0.25% drop in the US dollar. The unemployment rate fell to 5.2% as expected following July’s 5.4%. Wage inflation, as gauged by Average Hourly Earnings, increased 0.6% MoM, exceeding expectations of 0.3%. US equities fluctuated with no clear direction. US Treasury yields jumped higher by 3 bps to 1.32%, and gold and oil made small price gains. Financial markets will be closed Monday to celebrate Labor Day.
“To find joy in work is to discover the fountain of youth.”
September 3, 2021
EUR/USD 1.1887 GBP/USD 1.3848 USD/CAD 1.2537 AUD/USD .7440 USD/JPY 109.68 USD/CNH 6.4377 USD/ILS 3.2049 USD/MXN 19.9018 USD/CHF 0.9134 USD/INR 73.0188 USD/BRL 5.1739 USD/SGD 1.3410 USD/DKK 6.2548 USD/SEK 8.5511 USD/NOK 8.6467
The US dollar is broadly lower following this morning’s release of US jobs data for August, which showed unexpectedly weak jobs growth. Analysts now believe that the Fed may delay an announcement to taper later in Q4.GBP
The UK pound is higher following weak US jobs data, extending a strengthening trend in place for nearly three weeks. However, its performance against peer currencies has suffered as analysts are concerned that UK growth, which has been losing momentum, may influence the Bank of England’s decision to reduce stimulus measures.EUR
The euro extended its 10-day rally following the weak US jobs data. Strength in the common currency has been fueled by developing debate among European Central Bank members about the timing of a move away from emergency stimulus policies. Today’s release of Eurozone PMI was fairly strong, but slightly less than expected and Retail Sales of -2.3% for July was much weaker than expected.CAD
The Canadian dollar dropped to multi-week lows below 1.25 following release of weak US jobs data, then bounced back to key technical support at 1.2530 (200-day moving average). Traders may show caution over the coming weeks as political debate intensifies for federal elections on September 20.ASIA/PACIFIC
The JPY moved little overnight despite unexpected news that Japan’s prime minister, Yoshihide Suga, resigned. Suga’s approval ratings have recently collapsed as the country struggles with another wave of Covid-19 infections. There is no clear frontrunner to replace him. Japanese stocks jumped on the news.
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