After another massive NFP miss, the dollar plummets in the US session. The Canadian Dollar, on the other hand, has risen sharply in response to strong job figures. In terms of the week, the Loonie is now in an excellent position to finish first.
The Yen is still the poorest mover, but we’ll see if the Dollar can catch up before the weekends. The dollar is losing ground against its major counterparts on Friday, pulled down by a weaker-than-expected increase in private employment in the United States. Non-farm payrolls climbed by 194,000 in September, considerably below market estimates of roughly 500,000 new jobs, according to Labor Department data.
After a period of stability, the USD/CAD pair encountered a new supply on the penultimate day of the week, extending its recent bearish trend that had been in place for the previous three weeks. The US dollar fell across the board in response to the poor headline NFP number, which was viewed as a primary factor putting pressure on the major.
Following the release of the US jobs report, the market mood is unsettled, as evidenced by the split between gainers and losers in major European and American stock indices. Meanwhile, the US Dollar Index (DXY) shows the greenback is down 0.17 percent, clinging to 94.05.
USD Declines Amid Dismal NFP
USD Declines Amid Dismal NFP In September, the US economy added only 194,000 jobs, significantly less than the 488,000 predicted. Is it going to sabotage the Federal Reserve’s planned tapering? The dollar sank somewhat as a result of the poor NFP report, but investors believe this is only transitory because the payrolls number will have little impact on taper forecasts.
The potential details and revisions are not as frustrating as the top-line error implies. In the end, this number will still make the Fed commit to downsizing next month.
Given the recent trading pattern of the U.S. dollar and its close correlation with the unexpected momentum of related data, a more moderate tone should emerge. However, we believe this number is not convincing enough to cause a major reversal. The outlook for interest rates continues to rise (especially the 10-year real interest rate in the U.S.), so we believe that the financing currency will continue to struggle against the U.S. dollar.
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