European Session – Dollar tumbles after weak nonfarm payrolls
January 10, 2014 2:21 pm
The main event of the day was the release of the all-important US nonfarm payrolls report which missed forecasts and caused the dollar to tumble. The December figure came in at a mere 74,000, contrary to predictions for a number of at least 197,000.
There were even some predictions for a 250,000 increase in jobs from November’s 203,000.
Some attribute the disappointing number to the chilly weather in the US which dented job growth in the construction and leisure industries.
Today’s data comes two days after the private ADP jobs number which was surprisingly better-than-expected at 238,000 from a prior 229,000. Forecasts were for a 199,000 increase.
The unemployment data are important because the Federal Reserve pays close attention to them in order to continue with tapering. The Fed finally decided in December to taper in January by $10 billion from its current $85 billion-a-month-bond buying program. Therefore, the state of the US labour market remains central to how the Fed will continue with the slowdown in stimulus.
There was a lot of volatility in the currency markets after the nonfarm payrolls were released at 1330 GMT. The dollar plummeted against the yen immediately after the data, dipping to 104.18. The dollar had briefly spiked up to 10533 before the data.
The euro and the pound were rocketed higher against the dollar after the data to reverse earlier losses.
During the European session the main data was the release of both UK manufacturing and industrial production data for the month of November.
Both numbers disappointed as they came out flat on the month and October’s increases were revised down, causing sterling to tumble across the board. Sterling fell after the UK data to approach the key 1.6400 level where it lay until jumping to 1.6494 after the US jobs data.
The euro jumped to 1.3662 post-NFP to reverse earlier losses when it reached lows of 1.3573. Further gains for the euro could be limited as ECB President Mario Draghi’s dovish leaning comments from a post-ECB meeting yesterday will weigh on the currency.
The main event of the day was the release of the all-important US nonfarm payrolls report which missed forecasts and caused the dollar to tumble. The December figure came in at a mere 74,000, contrary to predictions for a number of at least 197,000.
There were even some predictions for a 250,000 increase in jobs from November’s 203,000.
Some attribute the disappointing number to the chilly weather in the US which dented job growth in the construction and leisure industries.
Today’s data comes two days after the private ADP jobs number which was surprisingly better-than-expected at 238,000 from a prior 229,000. Forecasts were for a 199,000 increase.
The unemployment data are important because the Federal Reserve pays close attention to them in order to continue with tapering. The Fed finally decided in December to taper in January by $10 billion from its current $85 billion-a-month-bond buying program. Therefore, the state of the US labour market remains central to how the Fed will continue with the slowdown in stimulus.
There was a lot of volatility in the currency markets after the nonfarm payrolls were released at 1330 GMT. The dollar plummeted against the yen immediately after the data, dipping to 104.18. The dollar had briefly spiked up to 10533 before the data.
The euro and the pound were rocketed higher against the dollar after the data to reverse earlier losses.
During the European session the main data was the release of both UK manufacturing and industrial production data for the month of November.
Both numbers disappointed as they came out flat on the month and October’s increases were revised down, causing sterling to tumble across the board.
Sterling fell after the UK data to approach the key 1.6400 level where it lay until jumping to 1.6494 after the US jobs data.
The euro jumped to 1.3662 post-NFP to reverse earlier losses when it reached lows of 1.3573. Further gains for the euro could be limited as ECB President Mario Draghi’s dovish leaning comments from a post-ECB meeting yesterday will weigh on the currency.
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