(Bloomberg) -- The dollar rallied against all Group-of-10 peers after the release of hotter-than-expected headline jobs data boosted Treasury yields and pushed traders to price out a July Federal Reserve rate cut. The yen fell 1% versus the US currency after the report.
- The Bloomberg Dollar Spot Index gains 0.5% after release of jobs data, sharpest intraday rise in 10 days; dollar bid against euro, yen and Asia EM FX
- US nonfarm payrolls grew 147k in June, more than the expected 106k; unemployment rate fell to 4.1%, lower than 4.3% forecast
- “A sigh of relief for the few dollar bulls still out there,” said Valentin Marinov, head of G-10 research and strategy at Credit Agricole. “In all, the currency will take its cue from the price action in the US rates markets”
- Still, focus on a weaker-than-expected private payrolls figure of 74k versus 100k forecast; hiring gains came predominately in state and local governments
- “The headline NFP figure beat expectations, sure, but not by a lot, and the private and manufacturing numbers don’t tell a great story,” said Helen Given, a currency trader at Monex USA.
- Policy sensitive two-year Treasury yield rises 9.5bp to 3.88%; traders completely price out quarter-point July Fed cut
- Elsewhere, House nears passage of Donald Trump’s tax and spending bill ahead of the president’s self-imposed July 4 deadline
- Japan’s yen leads G-10 losses versus dollar; USD/JPY up 1.1% to 145.23 day’s high
- Annual Rengo wage negotiations concluded with the largest pay increase in 34 years, supporting the Bank of Japan’s case for a cycle of higher wages and prices
- EUR/USD falls 0.5% to 1.1739; common currency still set for a gain on week
- Real money names seen unwinding long exposure ahead of US long weekend: trader
- Hefty expiries in focus, including 1.1700(€2.97b), 1.1775 (€2.52b), and 1.1800 (€5.52b): DTCC
- GBP/USD falls 0.1% to 1.3620, reversing earlier rise
- UK markets rebounded from a sharp selloff as Prime Minister Keir Starmer sought to calm speculation about a possible exit by Chancellor of the Exchequer Rachel Reeves by saying she will stay in the role for many years to come
- Still, options traders remain wary of another round of pound weakness
- Loonie falls 0.1% to USD/CAD 1.3604, loonie alongside cable outperforming among G-10
- Some information comes from FX traders familiar with the transactions who asked not to be identified because they aren’t authorized to speak publicly
Reporting by Carter Johnson and Vassilis Karamanis
