Daily Market Update

Employment Situation Improves U.S. Dollar Prospects Slightly 

July 07, 2017


The U.S. Dollar is trading in choppy ranges this morning as the market opens and reacts to employment data. Non-Farm Payrolls surprised this morning with an actual reading of 222K added jobs over the expected 178K while the Unemployment Rate climbed slightly from 4.3% to 4.4%. Indeed, these figures solidified what has been established for a while: job creation and labor are healthy aspects for the economy. In turn, this may help the buck recover some ground. The Bloomberg Dollar Spot Index had lost 1.0% of its strength since the last disappointing NFP reading.
We may close the week with a bit of an uptick, but the dollar will need better data in other sectors to truly start mounting any type of comeback. Trade talk headlines from the G-20 Summit in Germany may affect fluctuation some, worthy keeping an eye on. After stellar figures out of Canada, the “loonie” is up to its strongest level against the greenback since September 8.  



The Euro is slightly lower following the release of good employment numbers out of the U.S. and mixed data out of the Euro-zone. French Industrial Production and Manufacturing figures out of France and Spain beat estimates, but Retail Sales in Italy contracted instead of expanding as predicted.
Thus, the shared currency finishes the week at the same levels seen on Monday representing little change for the week after a monstrous hike of 2.3% in value in the past three weeks. Again, the G-20 meeting could produce some headlines that move the needle, but watching the news it seems like protesters are keeping some leaders trapped on the road to get there or their hotels.  



The Pound is down this morning based on unexpected declines in both Industrial and Manufacturing Output for the United Kingdom. Monthly manufacturing gauges were supposed to show an expansion of 0.5%, instead revealed a loss of (-0.2%), while industrial production fell by (-0.1%). Additionally, housing and construction growth did not occur.
Housing prices are only increasing by 2.6% under the estimated 3.1% and construction contracted a whopping (1.2%). Brexit anxieties, companies leaving, people staying away from long-term investments, it’s all a recipe for this economic reality, one that cannot be ignored at the negotiation table or voting booth.

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