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The greenback posted strongest weekly gains in seven weeks on Friday as the release of robust U.S. jobs reported triggered speculation that the Federal Reserve may act sooner rather than later in tightening its monetary policy.
Reuters reported U.S. job growth rose solidly in July amid demand for workers in the labor-intensive services industry, suggesting the economy maintained its strong momentum at the start of the second half.
Nonfarm payrolls increased by 943,000 jobs last month after rising 938,000 in June, the Labor Department said in its closely watched employment report on Friday. Economists polled by Reuters had forecast payrolls increasing by 870,000 jobs. The unemployment rate fell to 5.4% from 5.9% in June.
Versus the Japanese yen, although dollar extended its recent ascent and gained to 109.88 in Asian morning, price briefly retreated to 109.71 in early European morning on profit-taking before moving sideways. Price then jumped at New York open on the release of upbeat U.S. jobs report and rose to a 10-day peak of 110.35 in tandem with U.S. yields before easing.
The single currency traded sideways in Asia and met renewed selling at 1.1829 in early European morning and then weakened to 1.1801 ahead of New York open. Intra-day decline accelerated at New York open on usd’s broad-based strength in post-NFP trading and later tumbled to a 4-month trough at 1.1754 in New York, price last traded at 1.1762 near the close.
The British pound remained under pressure and retreated to 1.3915 in Asia before staging a rebound to 1.3932 in early European morning. However, the pair met renewed selling there and tumbled to an 8-day low at 1.3862 in New York morning on usd’s broad-based strength before staging a minor recovery to 1.3881.
In other news, Reuters reviewed that Bank of England Governor Andrew Bailey said inflation could turn out lower than the BoE predicted in its latest forecasts if production and supply problems caused by the pandemic are fixed rapidly and goods flood back on to market. “One of the risks is that these supply bottlenecks could unblock and we could get actually quite a wave of supply coming back onto the market,” Bailey said in a presentation to businesses, a day after the BoE said inflation was likely to hit 4% later this year.
Data to be released this week :
China PPI, CPI, Swiss unemployment rate, Germany exports, imports, trade balance, current account, EU Sentix index and U.S. JOLTS job openings on Monday.
New Zealand retail sales, U.K. BRC retail sales, Japan current account, trade balance, Eco watchers current, Eco watchers outlook, Australia NAC business conditions, NAC business confidence, Germany ZEW economic sentiment, ZEW current conditions, EU ZEW survey expectations, Canada leading index, U.S. labor costs, productivity and redbook on Tuesday.
New Zealand consumer sentiment, Japan machine tool orders, Germany CPI, HICP, Italy CPI, U.S. MBA mortgage application, CPI and Federal Budget on Wednesday.
New Zealand food price index, inflation forecast, U.K. RICS housing price balance, Japan corporate goods price, Australia consumer inflation, U.K. GDP, industrial output, manufacturing output, construction output, trade balance, Italy trade balance, EU industrial production, U.S. jobless claims, continuing jobless claims and PPI on Thursday.
New Zealand manufacturing PMI, Japan tertiary industry activity, France ILO unemployment rate, CPI, Germany wholesale price index, Swiss producer/import price, EU trade balance, U.S. import prices, export prices and University of Michigan sentiment on Friday.