Currency Updates:
U.S. Dollar Trading (USD) stock markets enjoyed some solid gains on the back of the January’s NonFarm Payrolls surging to 243k vs. 170k forecast and the Unemployment rate falling to 8.3% from 8.5%. The USD was not sold off as usual but instead able to hold near the opening levels with Gold and the Euro under pressure. In other data we saw January ISM services jump to 56.8 vs. 53.0 previously. In US stocks, DJIA +156 points closing at 12862, S&P +19 points closing at 1344 and NASDAQ +45 points closing at 2905k.
The Euro (EUR) fell post US jobs number with the disparity between the two economic recoveries becoming more evident. The other issue is concern that the Greece politicians are facing too much pressure from their people to accept tough new additional austerity measures and as the deadline approaches the chances of default and Greece leaving the EU are increasing. A decision is expected today from the Greece parliament. Looking ahead, December Industrial Orders forecast at 0.9% vs. -4.8% previously.
The Japanese Yen (JPY) the USD/JPY responded to the positive US jobs numbers moving back to the Y76.60 level after spending the past 48 hours testing Y76. The number while not reversing the downtrend do add to the argument the US economy is improving and if we see US housing stabilize or reverse then US interest rates may begin to increase sooner.
The Sterling (GBP) the GBP/USD eased slightly as the USD remained stable post jobs number and the Euro fell. The EUR/GBP did continue to test support under 0.8300 however and we are looking to the BOE rate announcement this week for further information about the UK monetary policy outlook as well as the ECB meeting for its counter. Looking ahead, BRC Retail Sales previously at 2.2%.
Australian Dollar (AUD) the AUD/USD rallied with US stocks as the traditional risk asset still outperformed after the US jobs numbers. The RBA meets on Tuesday and are expected to cut rates as the Australian economy slows down. The recent jobs and inflation data has been soft and this has left the door open for another 0.25% rate cut. AUD/JPY is the strongest pair in the market benefiting from the USD/JPY and AUD/USD upside on Friday.
Oil & Gold (XAU) Gold corrected overnight as the safe haven precious metal lost some of its relative shine to the USD. OIL/USD attempted a meek rally to $97.50 after the good US data Friday.
