Daily FX Trading Update: US NFP Misses Expectations, Jobless Rate Improves – Nov 10, 2014

Daily FX Trading Update: US NFP Misses Expectations, Jobless Rate Improves - Nov 10, 2014

The US dollar gave up ground to its FX trading counterparts on Friday when the US non-farm payrolls figure missed expectations. Hiring picked up by 214K when analysts were expecting to see a 235K gain, although the jobless rate improved from 5.9% to 5.8% in the same month. Underlying labor components also showed improvements, as the participation rate stabilized while the under-employment rate ticked lower. Wage growth remains a concern, as average hourly earnings marked a mere 0.1% gain instead of the expected 0.2% increase. For today, there are no major reports up for release from the US.

The euro took advantage of dollar weakness in recent FX trading, as data from the euro zone wasn’t all disappointing. The German industrial production figure fell short of expectations with a mere 1.4% gain instead of the estimated 2.1% rebound while the French industrial production saw a flat reading instead of the projected 0.1% decline. Italian industrial production and euro zone Sentix investor confidence data are up for release today.

FX Trading Update

The pound made a strong recovery to the dollar on Friday, even though UK data was weaker than expected. The trade deficit widened from 9.0 billion GBP to 9.8 billion GBP, suggesting a weak export performance. For today, there are no major reports up for release from the UK, which suggests that consolidation could be seen or that risk sentiment might be the main driver of FX trading price action.

The franc advanced towards the end of the week, even though Swiss retail sales turned out to be a disappointment. The report showed a mere 0.3% gain instead of the projected 2.2% increase while the previous reading was downgraded to 1.4%. Foreign currency reserves declined while the jobless rate held steady at 3.2% as expected. There are no reports due from Switzerland today.

The yen recovered to the dollar, as the US jobs report headline figures were disappointing. Japanese officials’ comments on how the weak yen might result to economic damage also forced the currency to take a break from its dive. There are no reports up for release from Japan today, leaving risk appetite in the driver’s seat for FX trading.

The comdolls all took advantage of dollar weakness last week, as FX trading profit-taking also took place. Canada saw a stronger than expected jobs report, with a hiring gain of 43.1K in October and a jobless rate decline from 6.8% to 6.5%. Earlier today, Australia’s home loans report showed a worse than expected 0.7% drop while Chinese CPI came in line with expectations at 1.6%. The PPI was weaker than expected though, as it marked a 2.2% drop and hinted of weaker price pressures down the line.

To contact the reporter of the story: James Brennan at james@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.