The Vegas of FX

4 March, 2016

Someone asked me this week my forecast for the US payrolls number and I said that I didn’t have one. This may seem strange, but the up-shot of it is that this number is very much a lottery. I did spend a fair amount of time trying to forecast it many years ago, but the seasonals and the revisions to back data made it a fairly pointless affair. You could be bang on with the headline change, only to see 100k of upward revisions to the prior months and/or a move in the unemployment rate which would counteract any benefit received from being ‘right’ on the headline number. So, for what it’s worth, the rate is seen steady at 4.9% today, with the headline seen rising 195k, from the previous reading of 151k. The dollar should not be as sensitive to the outcome as was the case a few months ago, because expectations for a near-term move in rates are so low.

The pattern of activity this week in FX markets has been of continued recovery from the predominant themes of the depths of February. So sterling has continued its recovery, with the yen softer and the commodity currencies gaining more vigour, in part helped by the recovery in the oil prices from the lows seen last month. A fair deal of this is recovery from what were seen as over-sold positions in many markets, so we’re getting to the stage whereby the markets will be looking for validation of these new levels in the prevailing data. Today’s US data should play a part in that. It’s interesting to see emerging markets doing well in the current environment, the Brazilian Real (which was hammered last year) up 5% this year, with the Russian rouble and Korean Won also doing well.


Source link  
CB meetings dominate the week

With no impactful economic data releases on the calendar today, the markets are focusing on a plethora of Central Bank meetings scheduled...

No Surprises from BoC & ADP

In an unsurprising move, the Bank of Canada decided to hold its benchmark lending rate at 1%, after two small hikes earlier in 2017. The BoC stated...

Moderate Gains for USD

On Monday, the US Commerce Department released Factory Orders data for October, indicating that the continued strength in the Manufacturing...


OPEC Extends Output Cuts

On Thursday, OPEC (Organization of Petroleum Exporters) and non-OPEC producers led by Russia agreed to keep output cuts until the end of 2018...

US Economy Expands Faster Than Predicted

Data released on Wednesday showed that the US economy expanded at its quickest pace since 2014 in Q3. The US Commerce Department said that...

Political Turmoil in Germany Hurts EUR

The EUR lost ground against many of its peers on Monday on news that Chancellor Angel Merkel’s efforts to form a coalition government had collapsed...


USD Suffers on Subpoena News

The Trump Administration is back in the spotlight with news of a report that Special counsel Robert Mueller’s investigators have issued a subpoena...

Positive data negated by tax plan opposition

The US Labor Department released data on Wednesday showing the consumer price index edged up by 0.1% in October after climbing by 0.5%...

Data Boosts EUR Can CPI Boost USD?

EUR received a boost on Tuesday, as data from Destatis showed German Preliminary GDP climbed to 0.8% in Q3, beating forecasts of 0.6%. In addition...

  


Share: