The US Bureau of Labor and Statistics Employment Situation Report issued on 3 April missed the lowest consensus reading by a hefty margin. This report does weigh heavily in the US Federal Reserve’s policy decision. Further, the exceptionally good reports in the previous months of February and January were revised down about 70,000 jobs, or about 12% of the previous two months total. Wages, also a key indicator for Fed watchers, were reported at the high end, 0.3% vs 0.1% the prior month. Lastly the average number of workweek hours declined to 34.5 hours from 34.6 hours.
Had the case been that the Fed would have to begin the lift off the zero bound, it would have created a glimmer of hope for bond traders trying to eke out positive yields with so many Eurozone sovereigns yielding negative. Hence, it would have generated a lot of demand for the dollar and thus strengthened the dollar against major currencies. One example in particular is USD/CHF, trading around 0.95 Francs to 1.00 USD.
Had the case been that the Fed would have to begin the lift off the zero bound, it would have created a glimmer of hope for bond traders trying to eke out positive yields with so many Eurozone sovereigns yielding negative. Hence, it would have generated a lot of demand for the dollar and thus strengthened the dollar against major currencies. One example in particular is USD/CHF, trading around 0.95 Francs to 1.00 USD.
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