The U.S. dollar held on to its weekly gains overnight as traders awaited this morning’s economic data.
The greenback is under modest pressure in early trading as Non-Farm payrolls missed estimates. Payrolls rose only 103K in March, failing to miss estimates of 185K gains. However, February’s impressive print was revised upward to 326K. The jobless rate held at 4.1%.
Once the dust settles from the payrolls print, markets will refocus back on the headline risk surrounding trade. Equity futures show a sharply lower open after President Trump doubled down on his conformation with China and asked the U.S. Trade Representative to consider another 100 billion dollars in additional tariffs. Violent moves in global equities have become the norm but the currency markets have largely shrugged off the headlines. Commodity prices are soft so the Canadian and New Zealand dollars are slightly weaker.
New Federal Reserve Chairman Jerome Powell will speech on “Economic Outlook” at 1:30 pm today and could spark some late volatility.
The Euro remains at the weakest end of recent ranges as the trend of soft European economic data continued today. German industrial production fell 1.6%, missing forecasts for a 0.2% gain. German construction PMI also contracted while retail PMIs for Germany, France and Italy all failed to meet expectations.
The Japanese yen was unchanged overnight, but USD/JPY has experienced a good deal of volatility this week. The safe-haven yen gained last week as tensions between the U.S. and China grew. However, global equity markets have rallied the second half of the week causing the Japanese yen to fall to a three week low against the U.S. dollar.