Dollar Higher After a Strong Non Farms Print

We saw a decent recover for the dollar across the currencies on Friday night after the a very strong Non Farms Payroll result, it came out at 209k which was much better than the expected 180k. Probably the best move for dollar bulls was against the Euro which had been hugging the topside of it’s range for much of the week, it dropped from around 1.1870 to a low of 1.1728 over the session. We also saw good moves against the sterling and yen as the market corrected what had been another tough week for the dollar.

Traders will now be assessing the longevity of this move, even though it’s a step in the right direction, this number doesn’t yet change the fundamentals that have been pushing the dollar lower over the last couple of months and traders will be looking for these job numbers to translate through to the inflation data. Usually, we’d expect the market to remain in a dollar positive frame of mind for the next few sessions at least after such a good result, however there are already signs that the market will use this move to sell dollars on the rally with the Euro notably finding good support just above the support trend line.

Looking ahead to this week and it’s nowhere near as busy as last week on the fundamental data front but there are some significant numbers coming out that traders will be focusing on, particularly the US CPI data later in the week. First up today and traders in Asia will be looking at the RBNZ quarterly Inflation expectations data that is due out of New Zealand this afternoon. Into the London session and it’s pretty quiet although Chf traders will be looking closely at the Foreign Currency reserves data after recent moves in the cross.

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