Swiss franc and yen were among top performers in the Group of 10, while the Canadian dollar was lagging behind peers after domestic labor report.
- The Bloomberg Dollar Spot Index fluctuated between losses and gains, on track for a weekly gain
- “Unemployment ticked up and that’s likely why we’re seeing a swing against the dollar,” said Helen Given, a foreign-exchange trader at Monex. “Traders have also been looking for reasons to cut out of some of the USD longs they took immediately post-election, so we might be seeing a rather outsized reaction to what is on the surface a pretty benign release”
- “Market participants are also a bit more certain now that the Fed should cut interest rates by 25 basis points later this month,” she said
- “Investors may want to keep their powder dry ahead of the November CPI next Wednesday — that could be more consequential for the outcome of the FOMC meeting than the still noisy labor data,” Valentin Marinov, head of G-10 FX research at Credit Agricole CIB in London, wrote in a note
- EUR/USD down 0.2% to 1.0571
- German industrial production fell in October, kicking off the final quarter with an unexpected decline and dashing hopes that the key sector for Europe’s largest economy may slowly be overcoming its malaise
- The European Central Bank will cut interest rates more rapidly than previously envisaged to perk up an economy facing weaker growth and inflation, a Bloomberg survey showed
- USD/CAD jumped 0.5% to 1.4088
- Canada’s biggest employment gains since April failed to prevent the jobless rate from surging to the highest level in three years, likely bolstering the case for the central bank to keep cutting rates at a faster pace
- This labor report supports the case for 50bp cut by the Bank of Canada next week, according to Sarah Ying, head of foreign-exchange strategy at CIBC Capital Markets
- USD/JPY fell 0.2% to 149.86. Data earlier saw strong growth in local wages in Japan, supporting the case for an interest-rate hike later this month
- New Zealand and Australian dollars were lagging many peers in the Group of 10, with some strategists suggesting the declines are due to President-elect Trump’s choice of a China hawk to be his ambassador to the nation
- AUD/USD fell 0.3% to 0.6433
- NZD/USD down 0.3% to 0.5871
- Some information comes from FX traders familiar with the transactions who asked not to be identified because they aren’t authorized to speak publicly
