US wage growth stops the USD bulls
City Index January 12, 2015 2:15 PM
<p>Fridays NFP data was stronger than expected at 252k, with the previous revised up to 353k from 321k. This gave the USD a boost and […]</p>
Fridays NFP data was stronger than expected at 252k, with the previous revised up to 353k from 321k.
This gave the USD a boost and with a fall in unemployment to 5.6%, it all seemed to be back on course for the US. The surprise came after the dust had settled and the wage data was noticed to have fallen to -0.2% from 0.2%. This put pressure on the greenback giving back its gains and it was still under pressure this morning.
To add to the weakness, we heard from the Fed’s Evans, who is a voter on the policy, saying that he’d be patient before raising rates before 2016. It was a similar story from Fed’s Lockhart, who said that the jobs report is no reason to raise rates sooner.
Overnight the yen made some ground against a weak USD and the announcement that Japan are heading for a record $800bn budget for 2015-16. It’s currently trading around 118.50.
The euro started higher from Friday close as the USD weakened after the weak wage data from the US. Its main focus will be the ECB meeting at the end of the month, with reports that they will be looking to weigh up bond purchases of up 500 billion.
Currently, EUR/USD is trading just below 1.1850.
Supports 1.1830 1.1800 1.1750 | Resistance 1.1875 1.1900 1.1940
Supports 118.10 117.55 117.00 | Resistance 118.70 119.38 119.75
Supports 1.5100 1.5030 1.5000 | Resistance 1.5200 1.5230 1.5260
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