North American Summary and Highlights 4 October

North American session

September’s non-farm payroll was significantly stronger than expected, with a 254k increase, an above trend 0.4% increase in average hourly earnings and a fall in unemployment to 4.1% from 4.2%. This saw the USD rise sharply as bets on a 50bps November FOMC easing were taken off. Most of the action came in the knee-jerk response to the data.

USD/JPY saw the biggest response, extending gains to touch 149 in the afternoon after trading near 146.50 before the data. EUR/USD fell to near 1.0950 from 1.1030 before a modest correction. GBP/USD saw a more significant correction off its lows (below 1.31) than most, leaving GBP/USD near Asian levels around 1.3130, while EUR/GBP slipped to .8360. EUR/CHF was in contrast slightly higher at .9420. AUD/USD fell to .68 from .6840. USD/CAD gains from 1.3550 were relatively modest, with 1.36 not tested. AUD/CAD fell to .9220 from .9275. 

European morning session

USD/JPY edged up through the European morning session, gaining around 30 pips to 146.40 and correcting some of the declines seen in Asia overnight. USD/CHF was also higher, with EUR/CHF up 20 pips to 0.94, but EUR/USD was not much changed near 1.1025. GBP was the best performer, with GBP/USD gaining 30 pips to 1.3160, helped by a strong rise in the construction PMI for September. AUD/USD edged a little lower. 

There was little news of note awaiting the US employment numbers.