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U.S Dollar Gains - Strong Non-Farm Payroll Print


The Australian Dollar opens weaker this morning against the Greenback on the back of strong US Jobs report on Friday. The Aussie reached a low of 0.7914 before settling around 0.7930. Last Friday on the local data front Australia's retail sales for the month of June came in at 0.3%, above market expectations 0.2%.The upbeat retail sales data overshadowed the downward revision of the GDP forecast by the RBA. A fairly quiet day expected with a bank holiday in the state of New South Wales. On the data front today will see the release of ANZ Job Advertisements at 11.30 AEST. The AUD/USD pair is currently trading at 0.7933.    

The New Zealand Dollar fell against the Greenback on Friday on the back of upbeat US Jobs report as US jobs growth topped 200,000 for a second straight month. The New Zealand Dollar hit a low of 0.7396 during Friday’s session. This week on the local data front it all kicks off on Monday with Quarterly Inflation Expectations. However all eyes will be on Thursday’s RBNZ Monetary Policy Statement. All 11 economists polled by Bloomberg expect the central bank to keep rates at a record low 1.75 per cent at Thursday's review. The NZD/USD pair is currently trading at 0.7411. 

The Great British Pound was one of the worst performers during the American trading session falling to a two-week low of 1.3040. The Cable took the hit both locally and abroad with the Bank of England kicking off proceedings with the market interpreting the Governors’ statement as dovish. Despite the positive outcome of maintaining its’ monetary policy and hence it’s rate hike forecast, the Bank of England lowered its’ growth forecasts which the market decidedly did not take as positive. The Pound was then forced lower when its’ counterparts employment data showed a slight uptick above expectations in non-farm payroll figures. Opening this morning at 1.3043, the Sterling looks forward to a quiet day ahead with particular interest on US CPI numbers due for release this Friday.


Recent U.S. Dollar weakness was reversed after a strong Non-Farm payroll print for the second consecutive month. A boost in jobs of 209,000 vs 170,000, saw the U.S dollar index recover from fifteen month lows and up 0.7% for the day. Pushing the dollar higher was the announcement by Whitehouse economic advisor Gary Cohn, who suggested the corporate tax rate should be cut by at least a third to compete with developed countries. Market expectations of any further interest rate hikes after the NFP print was marginally higher with the CME Fedwatch tool pricing a 55% chance of an increase of 0.25%. EUR/USD bullish run came to an end, erasing weekly gains after a strong dataset from the United States, pulling back from a weekly high of 1.1906 to close at 1.1725. USD/JPY gains were seen during the Asian session and lifted post NFP to rally to a one week high of 111.03. Major news items are limited this week as we look towards US inflation figures on Friday.