Upbeat US jobs data lift Dollar as Euro surrenders weekly gains

Stronger-than-forecast US employment figures lift the US Dollar, wiping out EUR/USD’s weekly advance.
October US Nonfarm Payrolls increase by 165K, comfortably exceeding expectations of 65K.
Disappointing Eurozone Retail Sales and guarded ECB remarks put further downward pressure on the Euro.

A stronger-than-forecast US Nonfarm Payrolls (NFP) report draws demand towards the US Dollar (USD) on Friday, pushing EUR/USD lower and wiping out its entire advance for the week. The pair stands at around 1.1132 at the time of writing, a daily decline of 0.77%.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

October employment in the US increased by 165K, more than twice the forecast of 65K. September’s gain was also revised upwards, from 29K to 60K, while the Unemployment Rate declined from 4.2% to 4.1%.

Earnings figures likewise exceeded expectations, with Average Hourly Earnings increasing by 0.4% MoM against a forecast of 0.3%. Although annual wage growth slowed from 3.2% to 3.1%, it remained above the expected 2.9%.

At around 102.33, the US Dollar Index (DXY) is 0.73% higher on the day. The index measures the Greenback’s performance against a basket of six major currencies.

Labour market resilience, an assessment shared by most Fed officials, is evident in the data. With the Fed still committed to returning inflation to its 2% target, a further interest rate increase in December remains a possibility. The balance of inflation risks is still skewed upwards, notably because of higher energy costs associated with the Middle East conflict.

The Euro also faces pressure from Eurozone Retail Sales, which fell short of expectations. Following August’s 2% fall, sales declined by 0.7% MoM in September, rather than the 0.1% drop forecast. Year-on-year growth eased from 1.3% to 0.4%, missing expectations of 0.6%.

Despite policymakers’ caution, traders anticipate another interest rate rise from the European Central Bank (ECB) in December. Speaking on Friday, Chief Economist Philip Lane said inflation needed to return to target within a year or two, but acknowledged that financial conditions had already tightened. Echoing remarks made by ECB President Christine Lagarde on Thursday, Lane said: “Let’s gather information between now and December and let’s see what we do in December,”

US Dollar Leads Today’s Currency Gains

Today’s percentage moves in the US Dollar (USD) against the major currencies listed are set out below. The US Dollar recorded its largest gain against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.77%	0.79%	0.40%	0.80%	1.12%	1.20%	0.54%
EUR	-0.77%		0.03%	-0.37%	0.04%	0.35%	0.43%	-0.23%
GBP	-0.79%	-0.03%		-0.38%	0.01%	0.33%	0.41%	-0.25%
JPY	-0.40%	0.37%	0.38%		0.41%	0.73%	0.80%	0.15%
CAD	-0.80%	-0.04%	-0.01%	-0.41%		0.31%	0.39%	-0.27%
AUD	-1.12%	-0.35%	-0.33%	-0.73%	-0.31%		0.08%	-0.58%
NZD	-1.20%	-0.43%	-0.41%	-0.80%	-0.39%	-0.08%		-0.64%
CHF	-0.54%	0.23%	0.25%	-0.15%	0.27%	0.58%	0.64%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. Selecting the US Dollar on the left and following that row across to the Japanese Yen, for instance, gives the percentage change for USD (base)/JPY (quote) in the corresponding cell.