Market Review – 07/11/2014 19:25GMT

Dollar falls broadly on downbeat U.S. jobs data

The greenback fell across the board on Friday after the release of weaker-than-expected U.S. non-farm payrolls increased speculation that the Federal Reserve won’t tighten its policy anytime soon.

U.S. non-farm payrolls n private payrolls came in weaker-than-expected at 214K n 209K vs forecasts of 231K n 222K respectively whilst unemployment rate dropped to its lowest lvl in 6 years at 5.8%.

Versus the Japanese yen, the greenback traded with a firm bias in Asia and gained to 115.46 and rose marginally higher to a fresh 7-year peak at 115.62 at New York open. Dollar then tumbled to 114.61 on the release of poor U.S. jobs data before staging a brief but sharp recovery to 115.42 as the data also showed unemployment rate dropping to a 6-year low. Later, price met renewed selling and tanked to an intra-day low at 114.25 in New York afternoon before stabilizing.

Despite trading with a firm bias in Asia and gaining to 1.2408 in European morning, the single currency retreated to 1.2368 ahead of U.S. jobs report release. Euro spiked higher to 1.2442 immediately after the release before tumbling swiftly to a fresh 2-year low at 1.2357. Later, price pared its losses and rose to an intra-day high at 1.2470 in New York afternoon on dollar’s weakness.

The British pound remained under pressure in Asia and weakened to 1.5802 in European morning. Later, cable briefly spiked up to 1.5861 after the release of U.S. jobs data before falling swiftly to a fresh 1-year trough at 1.5790. However, price pared its losses and gained to an intra-day high at 1.5887 near New York close.

In other news, Fed Chief Janet Yellen, speaking at Bank of France symposium, said ‘lack of fiscal support has weakened U.S. and global economic recovery; governments need to significantly improve fiscal balances in good times to prepare for stimulus in bad times; monetary policy globally will need to normalize as economic activity and inflation return to normal; timing and speed will vary across countries; normalization could lead to heightened financial volatility.’

Data to be released this week:

Australia housing finance, China CPI, PPI, Italy industrial output, EU sentix index and Canada housing starts on Monday.

Japan trade balance, current account, tertiary industry index, Australia home price index, NAB business confidence, France market holiday, Canada market holiday and U.S. market holiday on Tuesday.

Australia Wage price index, UK average earnings, claimant count, ILO unemployment, BoE inflation report, EU industrial production, U.S. redbook retail sales, wholesale inventories and wholesale sales on Wednesday.

Japan CGPI, machinery orders, industrial output, capacity utilization, China industrial output, retail sales, Germany CPI, HICP, Swiss PPI, Italy CPI, Canada housing price index, U.S. jobless claims and Federal budget on Thursday.

France GDP, Germany GDP, Italy GDP, UK construction output, EU GDP, CPI, U.S. retail sales, export prices, import prices, business inventories, U. of Michigan sentiment and Canada manufacturing sales on Friday.