The US dollar enjoyed a strong rally against its forex rivals on Friday, thanks to upbeat jobs data. The NFP report showed a 271K increase in hiring, much higher than the projected 179K figure and the previous 137K rise. This was enough to bring the jobless rate down from 5.1% to 5.0%. Average hourly earnings also reflected stronger wage growth at 0.4% versus the 0.2% forecast, adding to upside inflationary pressures as well. Only the labor market conditions index is due from the US today.

The euro caved to dollar strength on Friday but was slightly higher against some of its higher-yielding counterparts. Data from the euro zone was mostly weaker than expected, with Germany reporting a 1.1% slump in industrial production versus the projected 0.6% gain. German trade balance and euro zone Sentix investor confidence data are due today.

The pound was able to score some gains against its non-dollar peers, thanks to upbeat data from the UK. Manufacturing production was better than expected at 0.8% versus the projected 0.4% uptick but industrial production showed a 0.2% drop. The trade balance was also better than expected at a smaller deficit of 9.4 billion GBP compared to the previous 10.8 billion GBP shortfall.

The franc slid against the dollar but managed to hold on to some of its gains against its other forex counterparts when risk aversion set in. Swiss foreign currency reserves swelled from 541B CHF to 551B CHF, hinting that the SNB may have intervened to keep the franc weak. There are no reports due from the Swiss economy today.

The yen gave up ground to the dollar but managed to advance against its higher-yielding rivals. Japan’s leading indicators fell short of expectations while BOJ Governor Kuroda spoke of the challenges to achieving price stability. Earlier today, Japan reported a 0.6% gain in average cash earnings, slightly higher than the projected 0.5% increase.

Commodity Currencies (AUD, NZD, CAD)
Comdolls gave up ground to the dollar due to the risk-off environment last Friday, as the prospect of Fed tightening means higher borrowing costs and therefore lower spending among consumers and businesses. Jobs figures from Canada beat expectations but underlying components indicated that the 44.4K rise in employment was mostly just a result of part-time hiring. Over the weekend, China printed a larger trade surplus spurred by a drop in exports and an even larger drop in imports.

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