The US dollar was able to take a break from its slide when traders started pricing in strong NFP results. The consensus is for a 170K gain in hiring but analysts seem to be looking forward to a reading above 200K which might reinforce the Fed’s hawkish bias. Average hourly earnings could show a 0.3% uptick while the jobless rate is projected to hold steady at 4.7%.
The euro was mostly weaker against its peers even though data came in closely in line with expectations. The Spanish unemployment change figure came in at 57.3K versus the projected 60.2K reading while PPI was at 0.7% versus 0.5%. For today, final services PMI readings are due from the top euro zone economies, as well as the region’s retail sales figure.
The pound rallied then reversed with the BOE statement, as the central bank kept policy unchanged as expected. Policymakers upgraded growth forecasts but kept inflation estimates unchanged, hinting that they’re not looking to hike anytime soon. UK services PMI is due today and a fall from 56.2 to 55.8 is expected.
The franc caved to dollar strength but held on to its gains against the euro and the pound. Swiss retail sales posted a surprise 3.5% slump instead of the projected 0.5% uptick year-over-year. There are no reports due from the Swiss economy today.
The Japanese yen regained ground against the European currencies but consolidated to the commodity currencies. There are no reports due from Japan today so the yen could be driven by bond yields in reaction to the US NFP release.
Commodity Currencies (AUD, NZD, CAD)
The commodity currencies managed to hold on to their gains against most of their counterparts, particularly the Aussie which was boosted by strong trade balance and building approvals reports earlier in the day. The Chinese Caixin manufacturing PMI showed a steeper fall from 51.9 to 51.0 versus the projected dip to 51.8. In New Zealand, ANZ commodity prices slipped 0.1%. Trump’s threats on Iran also brought some jitters to the oil market.