7 Apr 2014
USD weaker post-Payrolls - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observes the greenback is on the back footing at the beginning of the week.
Key Quotes
"The US dollar has weakened modestly following the release of the US employment for March with USD/JPY falling back towards the 103.00-level overnight. The establishment report revealed that the US economy added a slightly weaker than expected 192k jobs in March although upward revisions to the prior two months totalled 37k."
"The US economy has added on average 178k jobs/month in Q1 compared to an average of 198k/month in Q4 2013, and an average of 187k/month over the last twelve months. As a result of the revisions to prior months, the recent weather–related slowdown in US employment growth is even more modest than initially reported."
"Overall, the underlying trend for employment growth continues to remain solid which supports the Fed’s view to taper QE. Employment growth in the household survey has proven even more robust in Q1 averaging 385k jobs/month."
"Still the unemployment rate unexpectedly remained unchanged at 6.7% in March despite a robust 476k increase in household employment, as the labour force also increased by 503k. The strong growth in the labour force in Q1 which averaged 430k/month supports the view that there is still plenty of spare capacity in the US economy."
"It is helping to dampen Fed rate hike expectations in the years ahead which are weighing modestly upon the US dollar. The modest decline in US yields has allowed emerging market currencies, especially those with elevated current account deficits and high yields such as the Brazilian real, South African rand, and Turkish lira to further extend their recent rebounds. The increasing cost of carry and ongoing decline in foreign exchange volatility is providing a more supportive environment for carry trades in the near-term."
Key Quotes
"The US dollar has weakened modestly following the release of the US employment for March with USD/JPY falling back towards the 103.00-level overnight. The establishment report revealed that the US economy added a slightly weaker than expected 192k jobs in March although upward revisions to the prior two months totalled 37k."
"The US economy has added on average 178k jobs/month in Q1 compared to an average of 198k/month in Q4 2013, and an average of 187k/month over the last twelve months. As a result of the revisions to prior months, the recent weather–related slowdown in US employment growth is even more modest than initially reported."
"Overall, the underlying trend for employment growth continues to remain solid which supports the Fed’s view to taper QE. Employment growth in the household survey has proven even more robust in Q1 averaging 385k jobs/month."
"Still the unemployment rate unexpectedly remained unchanged at 6.7% in March despite a robust 476k increase in household employment, as the labour force also increased by 503k. The strong growth in the labour force in Q1 which averaged 430k/month supports the view that there is still plenty of spare capacity in the US economy."
"It is helping to dampen Fed rate hike expectations in the years ahead which are weighing modestly upon the US dollar. The modest decline in US yields has allowed emerging market currencies, especially those with elevated current account deficits and high yields such as the Brazilian real, South African rand, and Turkish lira to further extend their recent rebounds. The increasing cost of carry and ongoing decline in foreign exchange volatility is providing a more supportive environment for carry trades in the near-term."