Upbeat U.S. Jobs Data Buoys Dollar
September 07 2018 - 5:10AM
RTTF2
The U.S. dollar strengthened against its key counterparts in the
European session on Friday, following the release of a data showing
better than expected job growth in August, which bolsters hopes for
a quarter point rate hike as early as next month.
Data from the Labor Department showed that the non-farm payroll
employment surged up by 201,000 jobs in August after climbing by a
downwardly revised 147,000 jobs in July.
Economists had expected employment to increase by about 191,000
jobs compared to the addition of 157,000 jobs originally reported
for the previous month.
Despite the stronger than expected job growth during the month,
the unemployment rate held at 3.9 percent in August compared to
expectations for a drop to 3.8 percent.
As a public comment period on new U.S. tariffs on $200 billion
worth of Chinese goods has expired, traders focus on news regarding
the implementation of the proposed tariffs by President Donald
Trump and his administration.
Adding to the worries about, Trump reportedly told a columnist
for the Wall Street Journal he is "still bothered by the terms of
U.S. trade with Japan."
The currency traded mixed against its major counterparts in the
Asian session. While the currency fell against the yen and the
euro, it held steady against the pound and the franc.
The greenback appreciated to a 2-day high of 0.6550 against the
kiwi, after falling to 0.6594 at 5:45 pm ET. Next key resistance
for the greenback is seen around the 0.64 region.
Following near a 5-month low of 0.9642 hit at 2:45 am ET, the
greenback reversed direction and bounced off to 0.9685 against the
franc. Further uptrend may take the greenback to a resistance
around the 0.99 level.
The greenback added 0.7 percent to hit a 2-day high of 1.1562
against the euro, from a low of 1.1649 hit at 3:00 am ET. The
greenback is seen finding resistance around the 1.13 mark.
Data from Destatis showed that Germany's exports declined for
the first time in three months in July, while imports grew at a
faster pace.
Exports fell unexpectedly 0.9 percent on month in July,
reversing June's 0.1 percent rise. This was the first fall in three
months. Shipments were expected to climb 0.3 percent.
Having dropped to more than a 2-week low of 110.38 against the
yen at 8:00 pm ET, the greenback changed its course and was trading
higher at 110.99. The greenback may possibly challenge resistance
around the 113.00 level.
Data from the Ministry of Internal Affairs and Communications
showed that Japan household spending rose 0.1 percent on year in
July, coming in at 283,387 yen.
That beat expectations for a decline of 0.9 percent following
the 1.2 percent drop in June.
The greenback was 1.0 percent higher at 0.7125 against the
aussie, a 2-1/2-year high. The pair was valued at 0.7195 when it
closed deals on Thursday. The greenback is likely to test
resistance around the 0.70 level, if it continues its rally.
Bouncing off from a 3-day low of 1.3110 seen at 8:15 am ET, the
greenback climbed to 1.3182 against the loonie. The greenback
finished yesterday's trading at 1.3141 against the loonie. The next
possible resistance for the greenback is seen around the 1.33
level.
The greenback regained some of its lost ground against the pound
with the pair trading at 1.2956. This follows a weekly low of
1.3028 touched at 6:45 am ET. On the upside, 1.27 is possibly seen
as the next resistance for the greenback.
Data from the Lloyds bank subsidiary Halifax and IHS Markit
showed that UK house prices rose at a marginal pace in August.
House prices gained 0.1 percent month-on-month in August, slower
than July's 1.2 percent increase.
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