US Dollar strength continued into week’s open late last night. Friday’s much awaited US Nonfarm Payrolls (NFP) number for March was a disappointment because the US economy created 98K jobs in March, only half of what was expected, and compared to a previous 219k in the previous month.
The initial knee-jerk reaction for the USD was that of a sell-off, but this quickly corrected and saw support flow back to the USD, support that as we have said continues even until this morning.
Helping support for the USD despite the change in NFP figure, was that the unemployment rate for the same period slipped to 4.5% from a previous and expected 4.7% in the previous period. It is also probably a realization that as the US moves deeper into full employment NFP figures will have to probably abandon the 200k figures and converge to a lower figure.
The USD has also been carefully watching the recent geo-political developments; as US missiles hit an airbase in Syria late last week and as US Navy moves towards the Korean peninsula in what constitues a warning and a precautionary measure to North Korea.
However the USD has managed to brush off all potential tensions and disappointing data as key US Fed officials continue to highlight the Fedreal Reserve’s commitment to upcoming rate hikes.
Later today Fed’s Chair Yellen is scheduled to speak at the University Of mIchigan. Later this week high impact data includes UK CPI and German Zew on Tuesday; CNY CPI, and BoC rate decision on Wednesday; AUD employment change and Michigan Sentiment on Thursday; and US CPI and US advance retail sales on Friday.