Dollar Gains Post-NFP, Pushes Against the Euro

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The dollar is rising in the early hours of the US morning, following better-than-expected job figures. It’s currently trying to break through versus the Euro. Following the release of job figures, the Canadian dollar has also strengthened. Sterling, on the other hand, has remained one of the weakest this week as the post-BoE selloff continues. The Euro and Swiss Franc, on the other hand, are catching up.

In October, non-farm payroll employment increased by 531k, above expectations of 425k. The amount for the previous month was likewise raised considerably higher, from 194k to 312k. Monthly job growth has averaged 582k so far this year. In February 2020, total non-farm employment was still -4.2 million, or -2.8 percent, lower than it was before the epidemic.

The unemployment rate fell from 4.8 percent to 4.6 percent, which was lower than the 4.7 percent forecast. At 61.6 percent, the labor force participation rate remained steady. The increase in average hourly wages was 0.4 percent, which was in line with predictions.

In October, Canada’s employment increased by 31.2 thousand, exceeding the 19.3 thousand forecast. The unemployment rate fell to 6.7 percent from 6.9 percent, which was below the 6.9 percent forecast. In September, retail sales in the Eurozone fell -0.3% mom, compared to a 0.2 percent mom forecast. Non-food products saw a -1.5 percent drop in retail trade volume, while food, beverages, and tobacco saw a 0.7 percent increase and motor fuels saw a 1.1 percent increase.

Retail sales in the EU fell by -0.2% year on year. The highest monthly declines in total retail trade volume were recorded in Germany (-2.5%), Finland (-1.9%), and the Netherlands (-1.9%), among the Member States for which data is available (-1.2 percent ). Estonia (+7.1%), Slovakia (+2.9%), and Luxembourg (+2.3%) had the largest gains.

Dollar Gets a Boost, Post-Payrolls

In October, the labor market in the United States began to improve. Although the dollar only received a minor boost following the payrolls report, experts believe that the data, valuation, and positioning favor continued firmness in the weeks ahead.

The numbers were solid, with payrolls up 531K (604K for the private sector), revisions up 235K, unemployment down 0.2 percentage points to 4.6 percent, and hourly wages up 0.4 percent MoM and 4.9 percent year over year. The only thing that disappointed me was the flat participation rate.

We’re not looking for an impulsive move higher in the USD; rather, we’re more in line with the assumption that the USD will be better positioned in the weeks ahead from a data, valuation, and positioning standpoint. We believe the tendency in the USD will be for a wide slog higher, in line with the seasonal trend seen in November. We believe the EUR/USD is in danger of falling below 1.15.