Daily Market Update

U.S. Dollar Winning on Labor Gains

September 07, 2018

The U.S. Dollar is thriving at the moment after Non-Farm Payrolls revealed the addition of 201K jobs in August, exceeding the expectation of 190K and crushing the ADP Private figures.

Overview

The Unemployment Rate went up to 3.9% from 3.8% while the Average Hourly Earnings improved by 0.4% versus a 0.2% estimate. Naturally, the buck is receiving the credit it deserves and has improved by an average of over half a percent against major counterparts since the data was pulled.

It is quite difficult to envision much in the way that can sink the dollar in the next few weeks as market watchers will continue to doubt riskier markets, especially when so many regions are experiencing political instability. As an example, Brazilian presidential candidate Jair Bolsonaro, who is running a far-right campaign similar to that in Italy, was stabbed yesterday in the middle of a rally. In the face of such havoc on central banks, trade tensions and extremism, the dollar is indeed king.

EUR

The Euro declined further as a result of divergence in economic performance. The Euro-zone has received a mixed bag while numbers in the U.S. have all mostly impressed or met their forecast. Gross Domestic Product in Q2 did not grow more than the 0.4% some economists thought could be beat.

Particularly of concern is the fact that German Factory Orders shrank by 0.9% and that trend will not be doing the Euro any favors. We foresee ongoing volatility, but it would have to be a surprise to help Euro rise this month.

CAD

The “Loonie” is down by 1.0% this week as it has battled negative trade headlines that turned sour after being optimistic last week. Additionally, the Unemployment Rate went up to 6.0% from 5.9% last month and hourly earnings failed to grow by the 3.0% expected reaching just 2.6%. the lack of stellar indicators and the never-ending roller-coaster of NAFTA will remain dark clouds on our neighbor for the month unless a real solution is achieved.

 

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