Forex headlines for May 2, 2014:

  • US April non-farm payrolls 288K vs 218K expected
  • Unemployment rate 6.3% vs 6.6% expected
  • Participation rate 62.8% vs 63.2%
  • Average hourly earnings 0.0% vs 0.2% exp
  • US March factory orders +1.1% vs +1.5% expected
  • Non-defense capital goods orders excluding aircraft revised to 3.5% from 2.2%
  • Ukraine says it will go to arbitration court with Gazprom if it does not reach agreement over gas prices
  • Transaction Tax deal could be announced by fin mins next week
  • Bank of Italy sees possible prolonged low inflation in eurozone
  • Syrian rebels lose “capital of the revolution”
  • CFTC Commitments of Traders: Small changes in positioning
  • S&P 500 down 2.5 points to 1881, up 0.9% on the week
  • Gold up $14 to $1299
  • WTI crude up $0.38 to $99.80
  • On the day, NZD leads, CAD trails
  • On the week, NZD leads while AUD lags

The story of the day was the surprisingly strong non-farm payrolls report, it was the surprising bust in the US dollar after the initial surge.

EUR/USD dropped a half-cent to 1.3812 after the report and then flattened out but two hours later it surged back and then continued to a fresh session high at 1.3881. It was a similar story across the board, leaving dragonfly candles on a number of starts.

Traders were left scratching their heads. Sure there were some negative caveats — there always are — and wage inflation is non-existent but it was still a solid report and the violence of the turnaround was a shock. One thing to consider was that it was the start of the month and the end of the week and those two things tend to attract flows.

Instead of drawing conclusions, I’m going to stay patient and see if the dollar can get back on its feet Monday.

An even bigger post-NFP move came in USD/JPY as it shot to 103.02 in moments but no higher and then slumped all the way back down to a session low at 102.13

USD/CAD was one of the leaders of the dollar-turnaround as it slumped to two-week low of 1.0936 only to whipsaw again back up to 1.0984 despite a solid day for commodities.

It’s one of those Friday’s where you just want to walk away and sort it all out Monday. Have a great weekend.