North American Summary and Highlights 4 September
Overview - The USD was supported by strong US employment data, particularly versus the CAD given a contrast with a weak Canadian employment report.
North American session
The USD saw a bounce on a stronger than expected US non-farm payroll increase of 162k, 127k private. Unemployment was unchanged at 4.1% and average hourly earnings rise by 0.3%, both as expected. With the September 16 FOMC decision still seen as dependent on CPI more than payrolls the bounce was largely reversed, but a positive USD tone subsequently resumed, albeit erasing only a small fraction of Thursday’s decline.
The USD’s correction from its post-data bounce was led by USD/JPY, which after rising to 156.50 fell sharply to 155.50 before recovering above 156. EUR/USD fell below 1.16 on the data but a rebound faded once pre-data levels around 1.1620 were reached. EUR/GBP and EUR/CHF moves were modest.
Canada’s August employment report was much weaker than expected with a fall of 41.7k though unemployment was stable at 6.4%. USD/CAD bounced above 1.3850 from near 1.38 before a modest correction. AUD/CAD bounced as high as 0.998 from 0.994 with AUD/USD little changed on the day.
European session
Consolidation and a bit of backfilling into US payrolls. USD/JPY back to the lower-mid 156’s having bounced from the fast run towards 155 on Thursday. EUR/USD also pretty close to the 1.16~ pivot that has held all week, and with large Friday expiries centered on the figure.
Oil, equities, also all fairly flat on the morning session. All in all, a waiting session with data, starting with payrolls today but then more crucially CPI in the coming week, seen more pivotal for the Sep FOMC.