USD lower after Friday's disappointing US nonfarm payrolls

Good morning

I hope you had a terrific weekend.  I did get a few jobs done in the garden but have to confess I spent a fair amount of time lounging around outside which made for a very pleasant weekend.

US nonfarms Friday very much surprised to the downside, coming in at -23k against an expected +80k, with previous data also revised lower.  Average earnings were also lower but somewhat the unemployment rate dipped to 4.1%.  US dollar softened with GBPUSD and EURUSD trading to 1.3510 and 1.1580, which for EURUSD was the highest it’s been since mid-June.  This data must surely offer doubt as to potential for a Fed rate rise which started to look more likely..

JPY took advantage of the softer USD with USDJPY dipping to 156.65 initially before settling back in the 157.70 area, but overnight it pushed higher again, now 158.45, pretty much the same as it was before the nonfarms, unlike other majors which have help most of their post-nonfarm gains against USD.  GBPUSD and EURUSD are currently 1.3494 and 1.1555.

Plenty of talk over the weekend over Iran and the Strait of Hormuz, none of which would please Trump as far as I can see, with Iran looking for compensation from US for damage relating to the war.  Meanwhile there are suggestions Trump is considering calling it a day in Iran whether or not he gets a deal on Iran’s nuclear programme, in order to get energy flowing once again.  There is talk that European airlines are struggling for jet fuel which could lead to some flight disruption in the coming weeks.

When I was in Morocco just one week ago I did wonder why the vast swathes of barren land were not filled with solar panels.  Now I am reading that the EU is investing billions of Euro’s in renewable energy projects across North Africa.  I’m not sure it is windy enough for windfarms but it is certainly sunny enough for solar.

Still, the UK has had it’s fair share of sunshine this year and it looks like temperatures will remain high this week, with another spike up above 30°c forecast for much of the week.  Hopefully  the skies will be clear for the partial solar eclipse on Wednesday, which also happens to be the peak activity in the Perseid meteor shower.  It has been a while since I stayed up to watch that but with the weather as it is maybe it’s a good time to sit outside and stare at the sky for an hour or so after midnight.

Not a great deal on the calendar today, but early tomorrow morning we’ll have the latest RBA rate announcement.  They are expected to keep rates unchanged at 4.35% after the disappointing employment data recently, although I wouldn’t be surprised if RBA Gov Bullock offers a hawkish tone in her accompanying statement.  AUDUSD and AUDNZD are currently 0.7070 and 1.1990, GBPAUD 1.9090.

Have a great day…

-  00.01 UK BRC retail sales

-  05.30 RBA rate announcement

-  06.30 RBA press conference