U.S. Session Forex Recap – September 7, 2015

  • US non-farm payrolls: 173K vs. 217K expected, 245K previous
  • US July NFP reading revised higher from 215K to 245K
  • US unemployment rate: 5.1% vs. 5.2% expected, 5.3% previous
  • US average hourly earnings: 0.3% vs. 0.2% expected and previous
  • US labor force participation rate remains at 62.6%
  • US equities decline on NFP, weekend flows
  • CA employment change: 12K vs. -5K expected, 6.6K previous
  • CA unemployment rate: 7.0% vs. 6.8% expected and previous
  • CA labor productivity (q/q): -0.6% vs. -0.8% expected, -0.5% previous
  • CA IVEY PMI: 58.0 vs. 53.3 expected, 52.9 previous
  • AU construction index, ANZ job ads report on tap
  • Chinese markets back in the game today

If you were expecting crazy volatility last Friday, then you would’ve been disappointed. Uncle Sam’s employment numbers mostly came in better-than-expected, but they didn’t exactly scream “SEPTEMBER RATE HIKE!!!” either.

For starters, the headline figure missed its 217K expectations with a 173K reading but July’s numbers got revised from 215K to 245K. The jobless rate also surprised to the upside with a 5.1% reading when market players were only expecting a downtick from 5.3% to 5.2%. This is good news especially since labor participation rate steadied at 62.6%, and implied that the decline in unemployment rate resulted from workers finding jobs instead of them giving up their searches. Last but not the least is the average hourly earnings, which popped up by 0.3% after last month’s 0.2% uptick.

The dollar bulls didn’t go all HULK SMASH! on the markets though. One possible explanation is that last Friday’s numbers still don’t guarantee a September rate hike. Then again, traders might be staying clear of the dollar ahead of the weekend and on Monday when China’s markets could possibly rock forex trends again. It also didn’t help dollar demand that U.S. equities ended the week on a weak note.

This is probably why USD/JPY fell to an intraday low of 118.64 before settling back to 119.03 while EUR/USD only popped up by 3 pips (+0.03%) to 1.1144. Heck, USD/CHF even slipped by 6 pips (-0.06%) to .9726!

The Greenback had better luck against the pound and the comdolls. Thanks to overall pound weakness, GBP/USD ended the session 52 pips (-0.34%) lower than its open price. AUD/USD also fell by 66 pips (-0.95%) to .6918 while NZD/USD plunged by 79 pips (-1.24%) to .6286.

The Loonie also had a bad day, not only against the Greenback but also against major currencies like the euro and yen. Though a net of 12,000 Canadian workers had found work in August, the unemployment rate also rose from 6.8% to 7.0%. This is bad news especially since Canada had recently hit recession status with its last GDP report. It also didn’t help the Loonie bulls that oil prices fell last Friday on oversupply concerns. Brent crude closed 2.11% lower at $49.61 while WTI crude oil prices fell by 1.5% to $46.05.

USD/CAD popped 33 pips higher (+0.25%) to 1.3266 while CAD/JPY fell by 28 pips (-0.31%) to 89.73 and EUR/CAD rose by 34 pips (+0.23%) to 1.4786.

Will the dollar continue to gain pips today? Asian session forex traders don’t have much to consider with only Australia’s AIG construction index and ANZ job ads reports on tap. Instead, keep an eye out for Chinese equities-related moves, as Chinese traders get back in the grind after a two-day holiday last week.

Good luck and good trading!

See also:

London Session Recap

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