Dollar gains broadly after stronger-than-expected U.S. jobs data

Market Review - 06/07/2019 07:01GMT  

Dollar gains broadly after stronger-than-expected U.S. jobs data

The greenback continued its earlier strength this week and rallied rallied across the board on Friday as robust U.S. NFP data sent U.S. Treasury yields higher and dampened speculation that the Federal Reserve will look to cut rates at its next meeting later tis month.  
  
Reuters reported nonfarm payrolls increased by 224,000 jobs last month, the most in five months, the government said. The economy created 11,000 fewer jobs in April and May than previously reported. Economists polled by Reuters had forecast payrolls rising 160,000 jobs in June.   
Job growth averaged 172,000 per month in the first half. Hiring has cooled from an average of 223,000 jobs per month in 2018. The pace, however, remains well above the roughly 100,000 needed to keep up with growth in the working age population.  The trend in wage growth has slowed from late last year when wages were rising at their fastest rate in a decade, pointing to moderate inflation. Average hourly earnings rose six cents or 0.2% after gaining 0.3% in May. That kept the annual increase in wages at 3.1% for a second straight month.  
  
Versus the Japanese yen, dollar traded with a firm bias in Asia and gained to 108.06 in early European morning before rallying at New York open in post-NFP trading and hitting session highs at 108.62 in New York morning before easing, price later inched high to 108.63.  
  
The single currency remained under pressure in Asia and dropped to 1.1257 in European morning, weighed down by weak German data. Price met renewed selling at 1.1270 at New York open and tumbled to a 2-week low of 1.1208 in post-NFP New York morning on dollar's broad-based strength, however, profit taking later lifetd price to 1.1328 ahead of the close.  
  
Reuters reported earlier German industrial orders fell far more than expected in May, and the Economy Ministry warned on Friday that this sector of Europe's largest economy was likely to remain weak in the coming months.  
Contracts for 'Made in Germany' goods were down by 2.2% on the month after rising slightly in March and April, data from the Economy Ministry showed. The reading undershot the Reuters consensus forecast for a 0.1% decline.  
  
The British pound traded sideways in Asia and met renewed selling at 1.2587 at European open, price dropped in tandem with euro in European morning. Intra-day decline accelerated at New York open in post-NFP trading and tumbled to a 6-month bottom at 1.2482 in New York morning before staging a recovery to 1.2530 at the close on short covering .  
On the data front, Reuters reported British unit labour costs, a gauge of competitiveness, rose by 2.1% in the first three months of the year compared with the same period of 2018, the sixth consecutive quarter of growth of more than 2%, official statistics showed on Friday.  
  
Data to be released later thais week :  
  
Japan current account, machinery orders, Eco watchers, Australia job ads, German industrial production, imports, exports, current account, trade balance and EU Sentix index on Monday.  
  
UK BRC retail sales, Australia NAB business conditions, business confidence, Swiss unemployment rate, Italy retail sales, Canada housing starts, building permits, U.S. business optimism, redbook retail sales and JOLTS job openings on Tuesday.  
  
Japan CGPI, Australia consumer confidence, China PPI, CPI, France industrial output, Italy industrial output, UK GDP, industrial output, manufacturing output, trade balance, U.S. mortgage applications, wholesale inventories and Canada BoC rate decision on Wednesday.  
  
Japan trade balance, tertiary industry index, Australia housing finance, Germany CPI, HICP, France CPI, Canada new housing price index, U.S. weekly earnings, CPI, core CPI and Federal budget on Thursday.  
  
China exports, imports, trade balance, Japan industrial output, Germany wholesale price index, EU industrial output, U.S. PPI, core PPI and export prices on Friday.