Daily Market Update

Non-Farm Payrolls Disappoint and U.S. Dollar is Main Victim

September 01, 2017

The U.S. Dollar is falling big time at the time of writing as Non-Farm Payroll and Unemployment figures revealed disappointing data.

USD

The U.S. Dollar is falling big time at the time of writing as Non-Farm Payroll and Unemployment figures revealed disappointing data. Not only did the economy only add 156K jobs under the expected 180K, but the prior month’s reading of 209K was revised down to just 189K, meaning that the past two months have failed to show growth of 200K, typically a sign of steadiness. Unemployment rate went up to 4.4% after being at the 16-year low of 4.3%.

The swings throughout the week resulted in the dollar having no gain or loss in comparison to its ten major counterparts. The Bloomberg Dollar Spot Index certainly had plenty of movement the past few days, but there’s no change after a mix of poor data and the destructive nature of Hurricane Harvey down in Texas. President Trump is said to be willing to forgo any government shutdown over raising the debt ceiling or money towards a border wall, instead wants congress to focus on raising the limit by over $6 Billion which will be dedicated to the recovery needed.The U.S. Dollar is falling big time at the time of writing as Non-Farm Payroll and Unemployment figures revealed disappointing data. Not only did the economy only add 156K jobs under the expected 180K, but the prior month’s reading of 209K was revised down to just 189K, meaning that the past two months have failed to show growth of 200K, typically a sign of steadiness. Unemployment rate went up to 4.4% after being at the 16-year low of 4.3%.

 

EUR

The Euro improved dramatically after the release of the employment situation in the U.S., but is starting to relax a bit. Euro-zone indicators have stayed strong throughout the year and although August was supposed to be a quiet month, the Euro improved as a result of ugliness elsewhere while plenty of economic activity in the Old Continent eased because of their beloved August holidays.

Overall in August, the shared currency rose 3.1% and touched its highest level in three years before coming down to more familiar levels. Gross Domestic Product figures will be out next Tuesday, an opportunity for the Euro to hold on to its gains or see them diminish if underwhelming growth is exposed.

 

CAD

Our neighbors are doing great. The Canadian economy is growing at a strong pace, 4.5% quarter-on-quarter, and the Bank of Canada’s confidence is certainly paying off for the “loonie” as well. The currency is up 2.0% after a month when oil prices fluctuated wildly, but the non-energy sector thrived.

Other than the U.S., Canada is the only other advanced economy whose central bank decided it was capable of raising interest rates after years of accommodative easing measures. Next week might be another chance for an uptick as chances of another hike are up to 55.1%. We believe the chance is there for further CAD appreciation as all factors line up in the currency’s favor at the moment and oil prices may increase as U.S. production after the natural disaster has been compromised.

 

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