Last Friday 4th August we had the monthly round of Non-Farm Payrolls data from the U.S.A. Average Hourly Earnings and the Unemployment Rate came in exactly as expected, at 0.3% and 4.3% respectively. The headline new jobs created figure, however, was 209,000 compared to the consensus estimate of 182,000 which represented an overshoot of 14.84%. I anticipated that a figure exceeding 220,000 would be likely to trigger a sharp move against the U.S. Dollar, which has been in a long-term bearish trend for some time. Although the number came in meaningfully lower, it still triggered a rise in the greenback, although it is an open question as to whether this is just a blip in the larger trend of the start of a meaningful reassessment of the Dollar. The best way to begin to answer that question is to start with a review of how much various currencies moved against the USD from the release of the data to the close of the market:
These are not notably large swings by any measure, so I believe we have not seen the start of a major trend reversal. The resilience of the EUR and NZD stand out, with the NZD looking more impressive than the AUD as the move did not break below any key technical support levels in the NZD/USD currency pair.
As for other assets, the stock market was barely changed, with the S&P 500 Index falling by a mere 0.08%. Crude Oil rose by 1.31% while Silver fell by a whopping 2.99%. This suggest that the converse of a strong EUR and NZD is weakness in the GBP and Silver. Nevertheless, I do not see any obvious “flow” action going on between any of these potential crosses.