Dollar Little Changed After Weaker Than Expected Jobs Report

The dollar is turning in a mixed performance against its major rivals Friday afternoon, but remains little changed overall. Traders were confronted by a deluge of economic data at the end of the holiday shortened trading week, but their focus remained on the all important U.S. jobs report.

After reporting a bigger than expected jump in employment in the previous month, the Labor Department released a report on Friday showing employment in the U.S. increased by much less than anticipated in the month of December.

The report said non-farm payroll employment climbed by 148,000 jobs in December after spiking by an upwardly revised 252,000 jobs in November. Economists had expected employment to increase by 190,000 jobs compared to the addition of 228,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate came in at 4.1 percent in December, unchanged from the two previous months and in line with economists’ estimates.

A report released by the Commerce Department on Friday showed the U.S. trade deficit widened more than expected in November, as the value of imports increased by more than the value of exports. The Commerce Department said the trade deficit widened to $50.5 billion in November from a revised $48.9 billion in October.

The deficit had been expected to widen to $49.5 billion from the $48.7 billion originally reported for the previous month.

For the second consecutive month, the Institute for Supply Management has released a report showing a slowdown in the pace of growth in activity in the U.S. service sector. The ISM said Friday that its non-manufacturing index dropped to 55.9 in December after falling to 57.4 in November.

While a reading above 50 still indicates growth in the service sector, economists had expected the index to inch back up to 57.6.

New orders for U.S. manufactured goods jumped by more than expected in the month of November, according to a report released by the Commerce Department on Friday. The Commerce Department said factory orders surged up by 1.3 percent in November after rising by an upwardly revised 0.4 percent in October.

Economists had expected factory orders to climb by 1.1 percent compared to the 0.1 percent drop originally reported for the previous month.

The dollar climbed to a high of $1.2020 against the Euro Friday, but has since eased back to around $1.2045.

Eurozone inflation eased slightly as expected at the end of 2017 on slower growth in energy prices, suggesting that an interest rate hike from the European Central Bank is likely to be a long way off. Inflation eased marginally to 1.4 percent in December from 1.5 percent in November, flash data from Eurostat showed Friday. The rate came in line with expectations.

Eurozone producer price inflation accelerated unexpectedly in November, data from Eurostat showed Friday. Producer prices climbed 2.8 percent year-over-year in November, faster than the 2.5 percent rise in October. Economists had expected the inflation to remain stable at 2.5 percent.

Germany’s retail sales rebounded in November, figures from Destatis revealed Friday. Retail sales climbed 4.4 percent year-on-year in November, reversing a revised 0.9 percent drop in October. Sales were forecast to grow 2.3 percent.

Germany’s construction activity expanded at the fastest pace in four months in December, buoyed by strong growth in commercial building work, survey data from IHS Markit showed Friday. The headline Purchasing Managers’ Index climbed to 53.7 in December from 53.1 in November.

France’s consumer prices grew at a steady pace in December, flash data from the statistical office Insee showed Friday. Consumer prices climbed 1.2 percent year-on-year in December, the same pace of increase as seen in November.

French consumer confidence strengthened in December to the highest level in six months, survey data from the statistical office Insee showed Friday. The consumer sentiment index climbed to 105 in December from 103 in November, which was revised up from 102. Economists had expected the index to rise to 103.

The buck rose to an early high of $1.3521 against the pound sterling Friday, but has since retreated to around $1.3570.

UK labor productivity increased at the fastest pace in more than six years in the third quarter, the Office for National Statistics said Friday. Output per hour grew 0.9 percent sequentially in the third quarter, the largest increase since the second quarter of 2011.

Shop prices in the United Kingdom were down 0.6 percent on year in December, the British Retail Consortium said on Friday. That missed expectations for a flat reading following the 0.1 percent contraction in November.

The greenback climbed to a 1-week high of Y113.299 against the Japanese Yen Friday, but has since pulled back to around Y113.160.

The services sector in Japan continued to expand in December, although at a marginally slower rate, the latest survey from Nikkei revealed on Friday with a Services PMI score of 51.1. That’s down from 51.2 in November, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The material has been provided by InstaForex Company – www.instaforex.com