We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.26%, while traders in NZD/USD are at opposite extremes with 72.66%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ksJ0N2pq6W
  • A macro forex trading guide exploring how to trade the Euro vs the Swedish Krona and Norwegian Krone through the prism of the Core-Perimeter model. Get your market update from @ZabelinDimitri here:https://t.co/n6zwlZJmGO https://t.co/F8sLZvRG1q
  • If you missed today's session on IG Client Sentiment where I discussed the outlook for the #DowJones, $AUDUSD and $USDCAD while discussing fundamentals and technicals, check out the recording below and stay tuned for a full report! - https://t.co/2wVxhtItzX
  • Wall Street Futures Update: Dow Jones (+0.213%) S&P 500 (+0.175%) Nasdaq Composite (+0.242%) [delayed] -BBG
  • RT @margaretyjy: Watch my Bloomberg TV interview at 9:00AM Singapore time. Coming in soon! https://t.co/Z6u6offept
  • The Core-Perimeter trading model helps traders understand interactions between global economies, helping to trade the assets embedded in these relationships. Get your market update from @ZabelinDimitri here:https://t.co/dKRAo00lfA https://t.co/jw5uvZBvRx
  • Hello there, traders! It has come to my attention that there have been people pretending to be me on Twitter. If you see anyone doing so, please be sure to report them. My Twitter handle is @ZabelinDimitri. Any variation of that is an imposter. Please spread the word.
  • After approximately 100 votes, it seems that a narrow majority of participants to my poll believe Gold ($GC_F) is going to resolve its congestion with a break lower: https://t.co/NTwXu7ZaGF
  • 🇯🇵 Bank Lending YoY (JUN) Actual: 6.2% Expected: 7.2% Previous: 4.8% https://www.dailyfx.com/economic-calendar#2020-07-07
  • Heads Up:🇯🇵 Bank Lending YoY (JUN) due at 23:50 GMT (15min) Expected: 7.2% Previous: 4.8% https://www.dailyfx.com/economic-calendar#2020-07-07
Forex: USD Struggles as NFPs Miss Forecast- Labor Force Expands

Forex: USD Struggles as NFPs Miss Forecast- Labor Force Expands

2013-02-01 13:50:00
David Song, Strategist
Share:

Talking Points

  • U.S. Dollar: NFPs Falls Short of Forecast, Unemployment Tips Higher
  • Euro: Banks to Repay EUR 3.5B of LTRO, Inflation Unexpectedly Lows
  • British Pound: U.K. Manufacturing Expands at Slower Pace, All Eyes On BoE

U.S. Dollar: NFPs Falls Short of Forecast, Unemployment Tips Higher

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) continues to pare the overnight advance to 10,176 as U.S. Non-Farm Payrolls increased 157K in January amid market expectations for a 165K print, but we saw the jobless rate unexpectedly increase to 7.9% from 7.8% as discouraged workers returned to the labor force.

At same time, the November reading was revised higher to reflect a 196K rise in employment from an initial forecast of 155K, and the ongoing expansion in the participation may encourage the Federal Reserve to adopt a more positive outlook for the world’s largest economy as the recovery in the labor market gradually gather space. As the region gets on a more sustainable path, we should see a growing number of Fed officials scale back their willingness to expand the balance sheet further, and the Federal Open Market Committee (FOMC) remains well positioned to halt its easing cycle later this year as the outlook for growth and inflation improves.

Nevertheless, the ISM Manufacturing report on tap for later today is expected to show the gauge for business outputs holding steady at 50.7 in January, but a positive development may help to shore up the dollar as it dampens expectations for additional monetary support.

Euro: Banks to Repay EUR 3.5B of LTRO, Inflation Unexpectedly Lows

The Euro rallied to a fresh monthly high of 1.3674 as the European Central Bank (ECB) said commercial banks will repay EUR 3.5B of the funds made available through the Long-Term Refinancing Operations, but the bullish sentiment surrounding the single currency is likely to be short-lived amid the deepening recession in Europe.

Indeed, unemployment in the euro-area held at a record-high of 11.7% for the third consecutive month in December, while the headline reading for inflation unexpectedly ease to 2.0% in January from 2.2% the month prior. As the economic downturn threatens price stability, we should see the ECB continue to carry out its easing cycle in the months ahead, and the Governing Council may look to target the benchmark interest rate as price growth is expected to slip below the 2% target over the policy horizon.

At the same time, growing threats for a credit event in Cyprus should further dampen the appeal of the single currency as European policy makers maintain a reactionary approach in addressing the debt crisis, and the ECB may have little choice but to embark on further non-standard measures as the governments operating under the monetary system become increasingly reliant on external support.

Although the relative strength index on the EURUSD continues to reflect an overbought signal, the oscillator needs to fall back below the 70 figure to pave the way for a short-term correction, and we may see the single currency come under pressure going into the ECB interest rate decision on February 7 as the central bank retains a dovish tone for monetary policy.

British Pound: U.K. Manufacturing Expands at Slower Pace, All Eyes On BoE

The British Pound pared the advance from earlier this week as manufacturing in the U.K. grew at a slower pace, but we may see the sterling regain its footing ahead of the Bank of England (BoE) interest rate decision on tap for the following week as the central bank remains upbeat on the economy.

Although the BoE is widely expected to maintain its current policy in February, the central bank may strike an improved outlook for the region as the Funding for Lending scheme works its way through the real economy, and we should see the central bank switch gears in 2013 in an effort to stem the upside risk for inflation.

As the multi-year upward trendline in the GBPUSD continues to take shape, the pair looks poised for further advance ahead of the central bank meeting, and we will maintain a bullish outlook for the sterling as the BoE slowly moves away from its easing cycle.

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

USD

14:55

9:55

U. of Michigan Confidence (JAN F)

71.5

71.3

USD

15:00

10:00

Construction Spending (MoM) (DEC)

0.6%

-0.3%

USD

15:00

10:00

ISM Manufacturing (JAN)

50.5

50.7

USD

15:00

10:00

ISM Prices Paid (JAN)

56

55.5

EUR

17:00

12:00

Italian New Car Registrations (YoY) (JAN)

-22.5%

EUR

17:00

12:00

Italian Budget Balance (JAN)

14.1B

EUR

17:00

12:00

Italian Budget Balance (Year to date) (JAN)

-48.5B

USD

22:00

17:00

Total Vehicle Sales (JAN)

15.20M

15.30M

USD

22:00

17:00

Domestic Vehicle Sales (JAN)

11.99M

11.97M

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.