Upbeat U.S. Jobs Data Lifts Dollar

Trading 02 nov 2018 Donner votre avis

The U.S. dollar strengthened against its major counterparts in the European session on Friday, following a data showing better than expected U.S. job growth for October, which cemented Fed rate hike hopes in December.

Data from the Labor Department showed that non-farm payroll employment surged up by 250,000 jobs in October after rising by a downwardly revised 118,000 jobs in September.

Economists had expected an increase of about 190,000 jobs compared to the addition of 134,000 jobs originally reported for the previous month.

Unemployment rate in October was unchanged from the previous month at 3.7 percent, its lowest level since hitting 3.5 percent in December of 1969.

Meanwhile, data from the Commerce Department showed that the U.S. trade deficit widened more than expected in September as the value of imports rose more than the value of exports.

The report said the trade deficit widened to $54.0 billion in September from a revised $53.3 billion in August. Economists had expected the trade deficit to widen to $53.6 billion.

Investors cheered positive comments from U.S. President Donald Trump about potential progress in U.S.-China trade relations.

A Bloomberg report later said that Trump wanted to reach a trade agreement with China at the G20 meeting and has asked U.S. cabinet officials to draft potential terms.

The currency traded mixed against its major counterparts in the Asian session. While it held steady against the franc and the pound, it rose against the yen. Against the euro, it fell.

The greenback advanced to 1.2983 against the pound, following a decline to a 10-day low of 1.3041 at 5:30 am ET. The greenback is likely to find resistance around the 1.27 level.

Survey data from IHS Markit showed that UK construction sector growth unexpectedly improved in October on a strong rebound in civil engineering, despite slower demand and business optimism at a 6-year low.

The IHS Markit/CIPS UK construction purchasing managers' index, or PMI, rose to 53.2 from 52.1 in September. Economists had expected a score of 52.

The greenback rose back to 113.03 against the yen, not far from a 2-day high of 113.10 touched at 1:20 am ET. This follows a 3-day low of 112.56 hit at 6:15 pm ET. On the upside, 115.00 is likely seen as the next resistance level for the greenback.

Data from the Bank of Japan showed that Japan monetary base rose 5.9 percent on year in October, coming in at 501.619 trillion yen.

That was unchanged from the previous month, which also saw a 5.9 percent jump.

After having dropped to a 9-day low of 1.1456 against the euro at 7:00 am ET, the greenback reversed direction and bounced off to 1.1411. Next key resistance for the greenback is seen around the 1.12 area.

Final data from IHS Markit showed that the euro area manufacturing sector expanded at the slowest pace in more than two years in October.

The manufacturing Purchasing Managers' Index for Eurozone fell to a 26-month low of 52.0 from 53.2 in September.

The greenback recovered to 1.3110 against the loonie, 0.6651 against the kiwi and 0.7204 against the aussie, reversing from its early 8-day low of 1.3049, more than 5-week lows of 0.6690 and 0.7258, respectively. The next possible resistance for the greenback is seen around 1.32 against the loonie, 0.70 against the aussie and 0.65 against the kiwi.

The greenback recouped some of its early losses against the franc with the pair trading at 1.0000. This may be compared to a 3-day low of 0.9968 seen at 7:00 am ET. If the greenback rises further, it may challenge resistance around the 1.01 level.

Data from the Federal Statistical Office showed that Switzerland's retail sales declined at the fastest pace since late 2016 in September.

Retail turnover fell 2.7 percent year-on-year in September after a revised 0.5 percent rise in August. This was the biggest fall since December 2016, when sales were down 4.2 percent.

The U.S. factory orders and durable goods orders for September are slated for release at 10:00 am ET.


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