U.S. Session Forex Recap – May 9, 2016

  • U.S. NFP down from 208K to 160K in April
  • U.S. unemployment rate remains at 5.0%
  • U.S. average hourly earnings up by 0.3% as expected vs. 0.2% uptick in March
  • Canada’s unemployment rate still at 7.1% vs. 7.2% uptick expected
  • Canada’s employment change down by 2.1K vs. 0.2K increase expected and 40.6K previous
  • Canada’s IVEY PMI up from 50.1 to 53.1 vs. 52.2 expected
  • China’s trade surplus up from 195B CNY to 298B CNY in April vs. 250B CNY previous

The dollar bulls flexed their muscles across the board last Friday despite the release of weaker-than-expected employment numbers from Uncle Sam. What’s up with that?!

Major Events:

U.S. employment reports – Uncle Sam’s jobs reports were a mixed bag of nuts, which sent the dollar all over the place in the first hour of the release.

The headline non-farm payrolls (NFP) numbers dropped to 160K in April, the lowest increase in seven months, while February and March’s figures were also revised lower. Meanwhile, average work week and hourly earnings both edged higher and supported speculations of stronger consumer spending activity in April. The unemployment rate remained at 5.0%.

Forex traders were quick to drop their June rate hike speculations, believing that the Fed would delay its rate hike after seeing this month’s employment numbers. Luckily for the Greenback, the prospect of a non-rate hike in June fueled the appetites of equities traders, which improved the demand for the dollar. Read Forex Gump’s NFP report breakdown if you want to know what the NFP numbers are hinting!

Canada’s employment numbers – A net of 2,100 workers had lost jobs in Canada when market players had been expecting an uptick of 2,000. Meanwhile the unemployment rate remained at 7.1% in April when analysts had expected a 7.2% jobless rate.

The weak jobs numbers didn’t surprise a lot of forex traders especially since it followed surprisingly strong readings in March. The oil-rich Alberta, for example, painted a more realistic picture with its 20,800 jobs losses in April after clocking in an additional 19,000 jobs in March. Overall the numbers hinted that Canada is still facing a rocky road to recovery from the decline in oil prices.

Major Currency Movers:

USD – The Greenback initially lost pips at the release of weaker-than-expected headline NFP reports. The dollar managed to gain back most of its losses though, thanks to an uptick in appetite for equities as soon as traders dropped their June rate hike speculations.

EUR/USD shot up to 1.1482 before falling back down to 1.1404 while USD/JPY fell to 106.44 before shooting back up to 107.15. Even GBP/USD reached a high of 1.4548 before closing at 1.4429 while USD/CHF recovered from .9652 to .9719.

CAD – The Loonie lost pips against its counterparts thanks to Canada’s weak jobs reports AND a weak IVEY PMI release.

USD/CAD shot up by 0.37% while CAD/JPY fell to a low of 82.25 before recovering to 82.94. Meanwhile EUR/CAD inched 0.17% higher to 1.4733.

Watch Out For:

  • 11:50 pm GMT: Japan’s monetary policy meeting minutes
  • 12:00 am GMT: Japan’s average cash earnings (0.6% expected vs. 0.7% previous)
  • 1:30 am GMT: ANZ job ads (0.2% previous)
  • 5:00 am GMT: Japan’s consumer confidence (40.8 expected vs. 41.7 previous)

See also:

Asian Session Recap

London Session Recap

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