The U.S. Dollar improved slightly and is currently experiencing some gains as the Employment Situation looks much better than expected.
Non-Farm Payrolls showed a change of 313K jobs, overachieving big time as the estimates were for an added 205K. Change in Manufacturing Payrolls was double the forecast at 31K over 15K.
However, the Unemployment Rate went up slightly to 4.1% and Average Hourly Earnings only grew 0.1% for the month, below the estimated 0.2% and bringing the annual average down. These figures help solidify the Fed Chairman’s confident commentary on the economy recently and have pushed the greenback into a third consecutive week of gains. Trade concerns over the signing of tariffs and a development in potential talks with North Korea have not set the dollar off course.
The Yen fell against the dollar as a direct result of optimistic markets. The announcement of potential talks of denuclearization and maybe peace in the Koreas that include President Donald Trump meeting Kim Jong Un caused a rally across global indexes. The Bank of Japan maintained its stance the same, careful approach to easing, and controlling the yield curve on bonds. The Yen has lost 5.8% of its value thus far this year.
Pound Sterling has seen wild movement lately as plans on Brexit seem more confusing than ever with both parties, the EU and U.K., now doubting what type of trade deal could even be made. The U.K. has made it somewhat clear that they do not wish to remain in a customs union, but want the Irish border untouched and financial services to be treated like other industrial matters.
Legally and practically this cannot be done and the European lawmakers have made it clear: if you want smooth commerce you’ll need the customs union agreements on no barriers to trade and abiding by EU regulations. The gridlock seems tough to resolve because the domestic political infighting amongst conservatives in Britain is also a battle for leadership over all matters Brexit and beyond. It is not pretty and they have to get something accomplished in talks by October.