FX Roundup: Mixed US data sends dollar higher

Mixed US data sent the dollar higher against major crosses and a basket of commodity linked currencies on Friday.

US employers added 151,000 jobs, compared with consensus expectations for a 190,000 gain and a downwardly-revised 262,000 the previous month, according to the Labor Department’s non-farm payrolls data.

The unemployment rate fell to 4.9% from 5% in December, nearing an eight-year low. Economists had expected the rate to remain unchanged at 5%. Average hourly earnings rose 2.5% year-on-year in January, beating forecasts for a 2.2% increase.

Meanwhile, the US trade deficit expanded in December to a seasonally adjusted $43.36bn from the previous month’s $42.23bn as exports fell 0.3% and imports increased 0.3%. Analysts had expected a deficit of $43.20bn.

Elsewhere, German factory orders fell 0.7% in December compared to a month earlier, which was a steeper decline than the 0.5% expected by economists. At 1728 GMT, the euro was down 0.63% against the greenback exchanging at $1.1138, while the pound was down 0.90% exchanging at $1.4458.

Commodity currencies saw another negative session as the greenback rose 0.91% against the Canadian dollar exchanging at CAD$1.3879. Concurrently, the Australian dollar fell 1.60% against the greenback exchanging at US$0.7086 and the New Zealand dollar rose 1.49% exchanging at US$0.6623.

Kit Juckes, head of forex at Societe Generale, said, “There are currencies which have been weaker than the dollar this week, but not in G10. It's a bit Groundhog Day-ish but the yen is back in top spot, up 3.7% against the dollar as the BoJ's shift to negative interest rates failed to deliver a durably weak currency.

“NZD comes near the top and AUD second bottom, which represents a very sharp fall in AUD/NZD, almost completely reversing the January rise in this pair. Strong New Zealand labour market data were the driver. Overall, the counterpart to the soft dollar is a drop in US yields that takes 10s from 1.96% on Monday afternoon to under 1.8% in Wednesday before they rebounded on the back of the US non-farm payroll report.”

Finally, in Latin America, the dollar rose against major regional crosses, including the Colombian (up 0.17%), Chilean (up 1.07%) and Mexican (up 0.54%) pesos and Brazilian real (up 0.58%).