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
Mixed
Wall Street
Bullish
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Indices Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Wall Street: 1.51% US 500: 1.30% France 40: -0.18% FTSE 100: -0.20% Germany 30: -0.21% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/h9AhhISMv5
  • Fed's Williams: - The shift away from LIBOR of 'paramount importance' - Progress made in transition so far is positive - BBG
  • BOE's Bailey says more work to be done before moving away from LIBOR - BBG
  • Hey traders! We are starting this week with some market highlights into the markets with @DailyFX Chief Strategist @JohnKicklighter . Get your market update 👇 https://t.co/kmsIkKfBah
  • White House Adviser Kudlow says no decision made by Trump over state and local aid yet - BBG
  • Heads Up:🇺🇸 Fed Williams Speech due at 15:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-07-13
  • Heads Up:🇬🇧 BoE Gov Bailey Speech due at 15:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-07-13
  • Poll: What do you think is driving the risk on sentiment these past three months (and perhaps the past three years)?
  • interesting setup highlighted by Warren here in $GBPUSD, cable testing a key resistance zone while USD showing weakness @WVenketas https://t.co/b662tnxzxR
  • The Nasdaq 100 has gapped to a fresh record high again today. We haven't had consecutive down days on this index since May 13th and the last three-day decline was back on March 9th https://t.co/l398jV51mw
US Dollar Ends Up Higher Following Mostly Positive Jobs Report

US Dollar Ends Up Higher Following Mostly Positive Jobs Report

2018-08-03 16:00:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- Headline jobs growth comes in at +157K, but the unemployment rate dropped to 3.9%.

- US wage growth steady at+2.7% y/y, which is now trailing headline inflation at +2.9% y/y.

- The US Dollar initially dropped but soon turned higher following the data, with the DXY Index rising from as low as 94.99 to as high as 95.23, at the time this report was written.

See our longer-term forecasts for the US Dollar, Euro, British Pound and more with the DailyFX Trading Guides

The US economy continues to chug along at a steady pace, as evidenced by another solid jobs report for the month of July. While the headline came in below expectations of +193K at +157K, the rest of the report was good enough to pick up the slack. After all, according to the Atlanta Fed’s Jobs Calculator, the US economy only needs to add on average +106K jobs per month over the next year in order to keep the unemployment rate at 4.0% or lower.

Indeed, with the headline jobs growth coming in above the +106K required to keep the unemployment rate on hold or lower, the U3 reading dipped to 3.9%. Concurrently, the broader gauge of unemployment, the U6 rate, came in at 7.5% from 7.8%.

Other aspects of the report were also in the ‘steady as she goes’ category. Wage growth remained at +2.7%, a pace seen frequently in recent months. But with headline CPI now at +2.9%, there is evidence that real wages have turned negative, a potential problem for consumers in the second half of the year. If anything, the lack of real wage growth speaks to the necessity behind the Federal Reserve’s desire to raise rates again.

Following the release of the data today, Fed funds futures were pricing in a 90% chance of a 25-bps rate hike in September and a 64% chance of a fourth and final hike in 2018 in December.

Here are the data driving the greenback this morning:

- USD Unemployment Rate (JUL): 3.9% as expected, from 4.0%.

- USD Change in Nonfarm Payrolls (JUL): +157K versus +193K expected, from +248K (revised higher from +213K).

- USD Labor Force Participation Rate (JUL): 62.9% as expected, unch.

- USD Average Hourly Earnings (JUL): +2.7% as expected, unch (y/y).

See the DailyFX economic calendar for Friday, August 3, 2018

EUR/USD Price Chart: 1-minute Timeframe (August 3, 2018 Intraday) (Chart 1)

US Dollar Ends Up Higher Following Mostly Positive Jobs Report

Immediately following the data, the US Dollar traded lower versus the Euro and the Japanese Yen, with the Dollar Index (DXY) dropping from 95.15 to as low as 94.99 in the wake of the report. However, by the time this report was written, the US Dollar had recouped all of its losses and then some. EUR/USD, which traded as high as 1.1609 after the release, was down at 1.1570 at the US cash equity open.

Read more: US-China Trade War Enters New Phase amid Yuan Depreciation

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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

DISCLOSURES

News & Analysis at your fingertips.