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US jobs report misses expectations

USD - United States Dollar

The US dollar was little moved after US nonfarm payroll data missed expectations. The US Dollar Index was down 0.11%, trading at 94.11 at the time of writing.

Nonfarm payrolls increased by 194,000 jobs in September. Economists had expected 500,000 new jobs.

Over the last few months, policymakers at the US Federal Reserve have stated – despite the current high level of inflation – that they are waiting to see employment return close to pre-pandemic levels before they consider making any adjustments to monetary policy. However, the USD’s lack of movement today shows that investors may be convinced that the Fed is unlikely to hold off on tapering even with the disappointing data.

Next week, we’re paying attention to inflation data with the latest US CPI number scheduled to be released on Wednesday. Annual inflation is currently above 5%, and as a result there is a growing consensus that the Fed should start to remove COVID-19 support policies that have propped up the economy for the past 18 months.

Key Movers

After slumping lower last week, the pound has recouped some of its losses with GBPUSD trading around the 1.36 level. Fuel shortages and delivery disruption headlines are fading from investors’ memories and sterling has managed to regain its footing a little as a result. Demand for the pound was also supported by rising market expectations that the Bank of England may act sooner than anticipated to tackle high inflation in the form of a rate hike.

The Canadian dollar climbed to its highest level against USD in more than two months after jobs data showed that the economy returned to pre-pandemic employment levels. Canada added 157,100 jobs in September, according to Statistics Canada. USDCAD was down 0.52%, trading around 1.2487 at the time of writing.

Expected Ranges

EUR/USD: 1.1544 - 1.1578 ▲

GBP/USD: 1.3586 - 1.3647 ▲

AUD/USD: 0.729 - 0.733 ▼

USD/CAD: 1.2456 - 1.2563 ▼