Employment data came in slightly weaker than expected; the U.S. dollar falls.

OFX Daily Market News

Posted by OFX

USD – United States Dollar

The Greenback was negatively affected by slightly weaker employment data. The EUR/USD pair has risen towards 1.1113 at the time of this writing. According to the U.S. Bureau of Labor Statistics, employment numbers in the U.S. ended last year with less positive momentum. Non-farm payrolls rose 145 K in December, the least since May. Furthermore, the unemployment rate came in at 3.5 percent as expected. While payroll numbers may be aligned with forecasts for continued moderation, wage numbers suggest that the labour market isn’t as stable as the unemployment rate shows. This is the first time their growth has fallen below 3 percent (average hourly earnings year to year came in at 2.9 percent) since 2018, and non-production workers (i.e., the average worker) weakened as well.

Despite payrolls coming in slightly weaker than expected, it might not be soft enough to raise the eyebrows of the Fed. This somewhat weak report will probably not change the Federal Reserve’s assessment that both the economy and monetary policy are in a “good place.” Fed Official Evans said yesterday from Milwaukee that the current rate (1.75 percent) well positions the U.S. economy to attain the desired 2 percent inflation figures. Furthermore, according to Evans, economic growth is expected between 2 to 2.25 percent in 2020.

Key Movers

Regarding the Eurozone, German industrial production rebounded in November after two months of decline. Still, a rebound for the German industry probably has not happened in other countries of the Euro Zone yet, and inflation figures are to be seen next week. Furthermore, for next week, the headlines in the U.K. will be in the spotlight, because numbers on output and inflation will be released.

Expected Ranges

USD/CAD: 1.3017 – 1.3069 ▼

EUR/USD: 1.1101 – 1.1132 ▲

GBP/USD: 1.3050 – 1.3095 ▲

AUD/USD: 0.6879 – 0.6913 ▲

NZD/USD: 0.6620 – 0.6656 ▲


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