North American Summary and Highlights 1 Aug

North American session

The USD fell sharply on the US employment report, which was weaker than expected with a 73k increase in July, and most significantly net downward revisions of 258k which left job growth in May and June as minimal. Unemployment edged up to 4.2% from 4.1% and average hourly earnings rose by 0.3% as expected. Later July’s ISM manufacturing index slipped to 48.0 from 49.0, but has little market impact. The resignation of Fed hawk Kugler helped extend USD losses in late trade. 

USD/JPY plunged below 147.50 from near 150.50 while EUR/USD rose to 1.1575 from near 1.14 as UST yields fell sharply, particularly at the front end. Riskier currencies were restrained by equity weakness but still advanced versus the USD. EUR/GBP rose above .87. AUD/USD ended in midrange after having peaked just below 65 after rising from near .6420 before the data.  

European morning session 

EUR/USD dropped 35 pips through the European morning, dipping below 1.14 for the first time since early June. Risky currencies were generally lower, mostly underperforming the EUR with the EUR gaining a little ground against GBP, AUD and SEK. EUR/CHF was also slightly higher, reacting to the increased tariff on Switzerland announced overnight. USD/CAD also gained 20 pips to 1.3875, but USD/JPY was unchanged at 150.55. 

News was fairly neutral, with final manufacturing PMIs providing no significant revisions and Eurozone CPI only marginally above consensus, with core in line with expectations, but USD and JPY gains reflected general weakness in equities, triggered by the tariff increases.