North American Summary and Highlights 2 July
Overview - Europe saw a sharp dip in USD/JPY while the USD fell more broadly after softer than expected UIS employment data.
North American session
The USD saw some recovery from its USD/JPY-led dip approaching the US employment release, but then fell on a weaker than expected report, staging only a partial recovery later in the session. Overall payrolls rose by only 57k in June and net of revisions to April and May were negative. Unemployment did fall to 4.2% from 4.3% but only because of a sharp fall in the labor force. Average hourly earnings were in line with expectations with a rise of 0.3%.
USD/JPY fell below 161 from above 161.50 before stabilizing just above 161. EUR/USD rose above 1.1450 from below 1.14 before stabilizing near 1.1435, EUR/GBP was little changed but EUR/CHF softer near .9190. EUR/JPY found support around 184. AUD/USD bounced above .69 to .6940 before correcting to .6920. USD/CAD fell below 1.42 to 1.4150 before correcting to 1.4185.
European session
European morning dominated by sharp, swift down move in USD/JPY, down from highs of 162.60 to lows just through 161. Exact trigger still topic of debate but market was primed for short yen covering ahead of data/US holiday in case of intervention, and Reuters sources story added to the potential for market spoofing i.e. long liquidate done noisily into a jittery market.
Action drags the dollar a touch, though EUR/USD only slightly north of 1.14 so still largely drifting into payrolls. Other main interest remains EUR/GBP after breaking range support late Wednesday. Follow through has been to 0.8550~. 0.85 is next down if move extends further on the breakout.