Dollar Ends Mixed, US Bond Yields Lift on Robust Payrolls

USD/JPY Jumps to 3 Day High, Euro Edges Up, AUD Flat

Summary: The performance of the US Dollar was mixed against other currencies as US bond yields rose following the release of a better-than-expected jobs report. The Dollar Index (DXY), which measures the value of the Dollar against six major currencies, ended slightly lower at 106.10. Initially, the Dollar Index increased after the US Payrolls report was published, but it later eased before market close. Against the Japanese Yen, which tends to be influenced by changes in bond yields, the US Dollar climbed to a high of 149.53 before settling at 149.25. The USD/JPY pair started the day at 149.47 on Friday. Although the September Unemployment Rate remained unchanged at 3.8%, Average Hourly Earnings in the US only grew by 0.2% instead of the anticipated 0.3%. Economists had predicted a Jobless rate of 3.7%.

Against the Canadian Dollar, the Greenback tumbled to 1.3650 from 1.3710 following a strong rise in Canadas Employment of 63,800 jobs from 39,900 previously.

The Euro (EUR/USD) edged up to 1.0585 against Fridays opening at 1.0550. Sterling (GBP/USD) settled at 1.2235, up from 1.2195. The Australian Dollar (AUD/USD) closed at 0.6385 (0.6373).

The Greenback finished modestly higher against the Asian and Emerging Market Currencies. USD/THB (Dollar-Thai Baht) rose to 37.07 from 36.93 while USD/CNH was little changed, at 7.3100.

Wall Street stocks jumped after initial weakness following the Employment data. The DOW finished up 1.02% to 33,430 (33,092) while the S&P 500 rallied 0.86% to 4,312 (4,255). Other global share markets rose. Japans Nikkei gained 1.03% to 31,377 (31,040).

Other economic data released Friday saw Japan‘s Average Cash Earnings (y/y) ease 1.1%, against forecasts of 1.5%. Germany’s Factory Orders (m/m) climbed to 3.9%, beating estimates at 1.6%.

The UK Halifax House Price Index was at -0.4%, up from a previous -1.8%, and better than economists expectations at -0.8%.

USD/JPY – The Dollar Yen pair rallied to 149.25 at the close of trade in New York, up from Fridays open at 148.80. The US 10-year bond yield climbed 9 basis points to 4.80%, boosting this Greenback against the Yen. In choppy trade, the overnight low recorded was 148.46.

EUR/USD – The Euro advanced against the Greenback to finish at 1.0585, up from Fridays 1.0550. The shared currency rallied to an overnight peak at 1.0600 before easing in late New York. The EUR/JPY pair also advanced, settling at 157.90 (156.60).

AUD/USD – The Aussie Battler rose modestly to 0.6385 from 0.6373 on Friday. The Australian Dollar traded to an overnight high at 0.6400 before dipping at the New York close. The overnight low recorded was at 0.6312 in choppy trade.

USD/CAD – Against the Canadian Loonie, the Dollar had a choppy session following the release of both Canadian and US jobs data. The Greenback soared to an overnight high at 1.3745 before tumbling to finish at 1.3650. The overnight low traded was 1.3643.

On the Lookout:

The week ahead sees the release of the US Headline and Core CPI (Thursday, 12 October).

Today, the US and Canadian markets are closed for holidays (Canadian Thanksgiving and US Columbus Day).

Today‘s economic calendar kicks off with Germany’s August Industrial Production (m/m f/c -0.1% from -0.8%; y/y no forecasts, previous was -2.1% - ACY Finlogix).

The Eurozone releases its Sentix Investor Confidence Index (f/c -24 from -21.5 previously)

• AUD/USD – The Australian Dollar finished modestly stronger against the Greenback to 0.6385 from 0.6373 Friday. Today, look for immediate resistance at 0.6400 followed by 0.6430. Immediate support can be found at 0.6355 followed by 0.6325. The next support level for the Aussie lies at 0.6285. Likely range today: 0.6310-0.6410 – trade the range.

• GBP/USD – Sterling gained versus the US Dollar to 1.2235, up from Fridays 1.2195. Look for immediate resistance at 1.2265 (overnight high traded was 1.2261). The next resistance level is found at 1.2395. On the downside, look for immediate support at 1.2200 followed by 1.2170. Look for the British Pound to trade in a likely range today of 1.2170-1.2270. Trade the range.