The US dollar popped higher on Friday, thanks to stronger than expected NFP data. The economy added 255K jobs in July versus the projected 180K increase. In addition, the June figure was upgraded from 287K to 292K but the jobless rate was unchanged at 4.9% instead of falling to the projected 4.8% figure. There are no major reports due from the US economy today.
The euro slumped to the dollar and commodity currencies but managed to hold steady to the pound and yen. Data from the euro zone came in mixed as German factory orders posted a weaker than expected 0.4% drop while the French trade balance showed a smaller than expected deficit. Euro zone Sentix investor confidence data and German industrial production data are due today.
The pound was still mostly weaker against its peers on Friday as traders are still reeling from the BOE’s decision to expand its easing program. In addition, UK house prices saw a sharper than expected 1.0% fall versus the projected 0.1% dip according to Halifax. There are no reports due from the UK economy today.
The franc lost ground to most of its forex rivals on Friday after the Swiss foreign currency reserves showed a rise from 609 billion CHF to 615 billion CHF, suggesting that monetary authorities might be interfering to weaken the franc in the forex market. Swiss CPI is due today and a 0.5% decline in price levels is eyed.
The yen weakened against most of its forex counterparts on Friday as traders moved their funds to the dollar. Over the weekend, Japan printed a better than expected trade balance of 1.65T JPY. There are no reports due from Japan today so yen pairs could be sensitive to market sentiment.
Commodity Currencies (AUD, NZD, CAD)
The Canadian dollar gave up ground on Friday as jobs data from Canada came in way below expectations. The economy lost 31.2K jobs in July versus the projected 10.2K gain while the jobless rate rose from 6.8% to 6.9%. Canada’s Ivey PMI rose from 51.7 to 57.0 to indicate a faster pace of industry growth. Earlier today, ANZ reported a decline of 0.8% in Australian job advertisements. China’s trade balance showed a larger than expected surplus, keeping the Aussie supported for now.