Dollar Rebounds After U.S. Jobs Data
October 04 2019 - 6:05AM
RTTF2
The U.S. dollar rebounded from its recent lows against its most
major counterparts in the European session on Friday, after the
release of mixed jobs data that showed the economy created fewer
jobs than expected in September, but the jobless rate dropped.
Data from the Labor Department showed that U.S. employment
increased less than expected in the month of September.
The report said non-farm payroll employment rose by 136,000 jobs
in September compared to economist estimates for an increase of
about 145,000 jobs.
Meanwhile, the increases in employment in July and August were
upwardly revised to 166,000 jobs and 168,000 jobs, respectively,
reflecting the addition of 45,000 more jobs than previously
reported.
The Labor Department also said the unemployment rate fell to 3.5
percent in September from 3.7 percent in August. Economists had
expected to unemployment rate to remain unchanged.
Data from the Commerce Department showed that the U.S. trade
deficit widened more than anticipated in August.
The report said the trade deficit widened to $54.9 billion in
August from $54.0 billion in July. Economists had expected the
trade deficit to widen to $54.5 billion.
Recent data on manufacturing and services came in well below
expectations, fueling concerns over a significant slowdown in
economy.
Market participants widely expect the Federal Reserve to cut
interest rates at its upcoming meeting on October 30.
The currency dropped against its major rivals in the previous
session, excepting the franc.
The greenback recovered to 1.0957 against the euro, from a low
of 1.0997 hit at 8:30 am ET. The greenback is seen finding
resistance around the 1.06 level.
Survey data from IHS Markit showed that Germany's construction
sector expanded modestly in September, led by a growth in housing
activity that offset slower declines in commercial and civil
engineering.
The construction purchasing managers' index, or PMI, rose to
50.1 in September from August's 62-month low of 46.3. Any reading
above 50 indicates expansion in the sector.
Reversing from a low of 1.2357 touched at 10:15 pm ET, the
greenback appreciated to 1.2279 against the pound. The next
possible resistance for the greenback is seen around the 1.21
level.
The greenback reached as high as 107.13 against the yen,
following a decline to 106.56 at 8:30 am ET. Next immediate
resistance for the greenback is seen around the 109.00 level.
Following a 9-day decline to 0.6337 against the kiwi at 8:30 am
ET, the greenback bounced off to 0.6307 immediately. Should the
greenback rises further, it may find resistance around the 0.61
level.
In contrast, the greenback fell to a 2-day low of 0.9925 against
the franc, compared to 0.9987 hit late New York Thursday. On the
downside, 0.97 is possibly seen as the next support level for the
greenback.
The greenback declined to a 2-day low of 1.3297 against the
loonie from Thursday's closing value of 1.3334. The currency is
likely to locate support around the 1.30 level.
Though the greenback recovered from data-led decline against the
aussie, it was short-lived. The greenback was trading at 0.6762
versus the aussie, near a 3-day low of 0.6766 hit at 8:30 am ET.
The currency may locate support around the 0.71 mark, if it weakens
further.
Data from the Australian Bureau of Statistics showed that
Australia's retail sales increased in August.
Retail sales advanced 0.4 percent on month, following a flat
growth a month ago. This was the fastest growth in four months.
However, the pace of growth was slightly slower than the expected
0.5 percent.
Looking ahead, Canada Ivey PMI for September will be released
shortly.
Fed Chairman Jerome Powell will deliver a speech in Washington
at 2:00 pm ET.
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