Forex headlines for January 10, 2014:

  • December non-farm payrolls 74K vs 197K expected
  • Unemployment rate 6.7% vs 7.0% expected
  • December Canadian employment change -45.9k vs +14.6k exp
  • Fed’s Lacker: Businesses are ‘reticent’ to hire
  • Regulators ease banking rules ‘to help economic recovery’
  • UK NIESR GDP estimate for Dec quarter 0.7% vs +0.8% prior
  • November US wholesale sales 1.0% vs 0.8% exp m/m
  • January US IBD economic optimism 45.2 vs 46.0 exp
  • Obama to nominate Fischer, Brainard and Powell for Fed
  • Fed’s Bullard expects 1.6% inflation this year but says prices a ‘wildcard’
  • Citi fires trader in forex probe
  • Gold up $20 to $1248
  • US 10 year yields down 11 bps to 2.86%
  • WTI crude rises to $92.72
  • S&P 500 up 4 points to 1842
  • AUD leads, CAD lags

The US dollar wasn’t fooled by the drop in the unemployment rate, it was a bad employment report and a tough session for the US dollar. In the minutes leading up to the report, someone tried to catch the market wrong-footed and bid-up the dollar to the highs of the day, including USD/JPY to 105.34. In the moments after the release, it was smashed down to 104.18 and eventually to 103.83, breaking the weekly lows and short-term support. On a closing basis, the news was a bit better as the pair recovered to 104.17 on late life in stocks.

EUR/USD jumped a full cent after payrolls, hitting 1.3687 at the highs and well back above the 55-day moving average. The euro didn’t give much back as the day wore on, closing at 1.3669.

Cable was also slammed down moments before the release, hitting some unfortunate stops on the way to 1.6383 then rising as high as 1.6517. Last at 1.6481.

The Canadian dollar was the laggard for the fourth consecutive day and this time it had a good reason after the dismal Canadian jobs report. It wasn’t all bad as USD/CAD rose as high as 1.0946 then chopped away down to 1.0887 at the end of the day.

AUD/USD was slow to react to the jobs report but eventually roared more than a cent higher, stopping at 0.8999 on a morning push. Late in the day a second run-up hit 0.9005 — that’s a key technical level because it was the high of the week. Watch for a break higher at the Asian open.