NFP adds to dollar strength as we await FOMC minutes
City Index July 8, 2013 1:49 PM
<p>The FX markets are seeing further dollar strength following on from a robust US labour report on Friday. The headline number came in at 195k […]</p>
The FX markets are seeing further dollar strength following on from a robust US labour report on Friday. The headline number came in at 195k versus expectations of 165k, with 70k added in revisions over the past two months. There were also solid gains in hourly average earnings and the participation rate, with the only disappointment being the unemployment rate remaining at 7.6%. The six-month average for US employment has now been over 200k throughout 2013, with tapering of assets now very likely to start in September with the announcement likely to come at the July FOMC.
In other news risk trade has seen the dollar hold gains from Friday as the Shanghai composite falls over 2% after China’s Finance Ministry has reportedly told central government agencies to cut expenditure by 5% this year. This adds to the theory that the new regime is prepared to let growth suffer as they too look to get the debt fuelled expansion under control.
This week’s data highlight will be FOMC minutes from the last meeting on Wednesday and I expect dollar demand to continue into this event as today is likely to see the return of many US market participants following the long weekend holiday as they get their first chance to buy the dollar following the events of the BOE, ECB and non-farm payrolls announcements.
Supports 1.2800-1.2750-1.2660 | Resistance 1.2920-1.3040-1.3100
Supports 100.80-100.30-99.80 | Resistance 101.60-102.60-103.74
Supports 1.4855-1.4785-1.4500 | Resistance 1.4920-1.5000-1.5165
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