Forex headlines for August 1, 2014:
- July non-farm payrolls +209K vs +230K expected
- Unemployment rate 6.2% vs 6.1% prior
- Avg weekly earnings 0.0% vs 0.2% exp
- July ISM manufacturing index 57.1 vs 56.0 expected
- July 2014 US Markit manufacturing PMI final 55.8 vs 56.5 exp
- July 2014 Michigan consumer sentiment final 81.8 vs 82.0 exp
- June 2014 US personal income 0.4% vs 0.4% exp m/m
- Consumer spending 0.4% vs 0.4% exp m/m
- Core PCE price index 1.5% vs 1.5% prior y/y
- June 2014 US construction spending -1.8% vs 0.5% exp m/m
- Fed’s Plosser says Fed funds rate well behind appropriate level
- Canadian RBC July manufacturing PMI 54.3 vs 53.5 prior
- Hilsenrath: Fed has “quietly encouraged” view of no hike until mid-2015
- Gold up $11 to $1293
- WTI crude down $0.65 to $97.52
- S&P 500 down 5 points to 1925
- CHF leads, GBP lags on the day
- USD leads, CAD lags on the week
The US dollar bulls would have taken a strong non-farm payrolls report as a signal the Fed would be raising rates sooner but the numbers didn’t cooperate. Not only was job growth a touch soft, wages were flat and the participation rate rose. The dollar immediately kicked lower across the board and after some indecision it stuck to the downside.
USD/JPY immediately fell to 102.70 but then rebounded back to 103.00. After a few bounces and some chop around the ISM number stops were tripped and the pair fell as low as 102.34. Some support from the 200dma and the 61.8% retracement started to kick in there and stocks gyrated but eventually it grinded higher to 102.59 late in the day.
EUR/USD quickly kicked to 1.3430 but then fell back down to 1.3390 on non-farm payrolls but the upside eventually won out and the pair hit 1.3445 at the highs. But the appetite to sell euros late in the day was undeniable and the pair slowly slid back down to 1.3423.
Cable was the dog of the day after a weak manufacturing PMI. Unlike other pairs, it never made a sustained bounce and we close near the lows at 1.6818 in a rough week for the pound.
USD/CAD ran up to 1.0944 in Europe but lurched lower on non-farm payrolls and fell as low as 1.0885 but the bulls are clearly in control of the pair as it climbed back to 1.0924 late in the day.
AUD/USD touched a two-month low of 0.9276 before NFP but finished a tough week with a bounce to 0.9311. NZD/USD was the biggest bouncer and finishes 40 pips off the lows at 0.8506.