Currency Updates:
U.S. Dollar Trading (USD) a mixed NFP report saw 157k vs. 160k forecast jobs created in January but the Unemployment Rate ticked higher to 7.9% vs. 7.8% previously. The market bought into the small dip after the numbers were released after traders looked at the major upward revisions of the previous 2 months of over +130k jobs. US stocks continued to march higher with the widely watched Dow Jones Stock Index breaking above 14000 for the first time in 5 years. Looking ahead, December Factory Orders forecast at 2.3% vs. 0.0% previously.
The Euro (EUR) EUR/USD was able to take advantage of the ‘not to bad not too good’ jobs numbers which suggested the FED would not be moving anytime soon on stopping bond buying purchase. The EUR/USD hit 1.3700 briefly at the height of the optimism but we have seen significant profit taking in Asia so far Monday back down to the lower 1.3600 region. EUR/JPY is the strongest pair in the market and proving considerable support.
The Japanese Yen (JPY) Yen selling was aggressive again on Friday with the increase in US Unemployment Rate only providing only the smallest of pullbacks before the USD/JPY and EUR/JPY uptrends resumed. EUR/JPY hit fresh trend highs above Y127 before easing with the major. USD/JPY grinded towards Y93 but has so far failed to breach the round figure.
The Sterling (GBP) it was a tail of two cities on Friday with the GBP/USD clobbered unable to track stocks higher and instead falling on the back of weak economic data. January Manufacturing PMI dropped to 50.8 vs. 51.4 previously. EUR/GBP buying was another source of GBP weakness with the important cross hitting 0.8700 on Friday. Looking ahead, UK January Construction PMI previously at 48.7. Also, December EU PPI forecast at 0.1% vs. -0.2% previously.
Australian Dollar (AUD) consolidated near 1.0400 on Friday unable to rally but at least the selling has subsided for now. The RBA is ahead on Tuesday and they are not expected to cut but traders will be watching the commentary closely for any hints about the next move or concern about the elevated AUD price. UPDATE Australian Building Permits at -4.4% vs. 1.1% previously.
Oil & Gold (XAU) Gold buyers were not afraid to react to the USD weakness post Jobs data on Friday but once again we have seen selling into the rally which peaked at $1682. OIL/USD was range bound between $97 and $98 closing at $97.50.
