Dollar rallies broadly on robust U.S. jobs data: Aug 8, 2016

Market Review - 06/08/2016 03:08GMT   

Dollar rallies broadly on robust U.S. jobs data

The greenback rallied across the board on Friday after the release of robust U.S. jobs report raised the probability of an interest rate hike from the Federal Reserve later this year.

In a report, the U.S. Department of Labor said non-farm payrolls rose to a seasonally adjusted 255K, from 292K in the preceding month whose figure was revised up from 287K. Analysts had expected U.S. non-farm payrolls to rise 180K last month.

U.S. Bureau of Labor Statistics, Department of Labor said that Average hourly earnings in the U.S. rose to a seasonally adjusted 0.3%, from 0.1% in the preceding month. Analysts had expected Average hourly earnings to rise to 0.2% last month.

Versus the Japanese yen, although the greenback dropped from Asian high at 101.37 to session low at 100.87 in European morning, price pared its losses and rallied at New York open post release of U.S. data and continued to ratchet higher in New York morning, hitting an intra-day high at 102.06 before retreating on profit-taking.

The single currency traded with a firm bias in Asia and Europe, then edged up to session high at 1.1162 at New York open, however, price met renewed selling there and tumbled to an intra-day low at 1.1046 in New York morning on dollar's broad-based strength. Later, euro staged a short-covering rebound to 1.1105 in New York afternoon.

The British pound also traded with a firm bias in Asia and Europe, rising to session high at 1.3175 ahead of New York open before tumbling to an intra-day low at 1.3022 in New York morning. Later, cable pared its losses and staged a short-covering rebound to 1.3097 in New York afternoon.

In other news, BoE deputy governor Broadbent said 'likely to vote for another rate cut unless growth beats expectations; labour market key to understanding scale of demand shock, highlights big fall in rec jobs survey; there are limits to what conventional fiscal policy as well as monetary policy can do to ease shock; does not expect banks to cut interest rates on every single product, will be gradual.'

Data to be release this week:

Japan current account, trade balance, Eco Watchers Survey, Germany industrial production, Swiss CPI, Euro zone Sentix investor confidence, Canada building permits and U.S. employment trends on Monday.

New Zealand electronic card retail sales, China, PPI, CPI, Australia business confidence, business conditions, Swiss unemployment rate, Germany imports, exports, trade balance, current account, France budget balance, U.K. BRC retail sales, industrial output, manufacturing output, trade balance, U.S. NFIB business optimism, labour cost, labour productivity, Redbook index, wholesale inventories, wholesale sales and Canada housing starts on Tuesday.

Japan corporate goods price, machinery orders, Australia consumer confidence, U.S. mortgage application, jobs opening and Federal budget on Wednesday.

New Zealand interest rate decision, Austalia inflation expectation, France CPI, Italy CPI, trade balance, U.K. housing survey, U.S. initial jobless claims, U.S. import price, export price and Canada new housing price on Thursday.

New Zealand business NZ PMI, retail sales, China industrial output, retail sales, Japan tertiary industry index, Germany GDP, CPI, Harmonised index of consumer prices, France non-farm payrolls, Italy GDP, Euro zone GDP, industrial production, U.S. PPI, retail sales, business inventories and Reuters/Michigan consumer sentiment index on Friday.