Dollar Fails to Find Additional Strength After Strong Jobs Report

After being under pressure over the day and a half since the Federal Reserve meeting, the U.S. dollar made minor gains against a handful of counterparts overnight on weak data abroad.

Overview

Overall the dollar remains under pressure and the Bloomberg Dollar Index declined for its third straight month in January.

There is a slew of economic data set for release today that will keep market participants on their toes. Non-farm payrolls showed an explosion of job gains in January. Total payrolls rose 304K, beating expectations of 165K jobs. However, December’s print was revised down by 90K so the aggregate gain was less impressive but still positive. The employment rate rose from 3.9 to 4.0%. The report also provided some downside as wage growth slowed. Average hourly earnings rose just 0.1% from the prior month marking the smallest increase since 2017.

Later ISM manufacturing and the University of Michigan consumer sentiment will hit the wire.

What to Watch Today…

  • • ISM Manufacturing and University of Michigan Consumer Sentiment

EUR

The Euro dipped slightly against the greenback overnight but remains within striking distance of its strongest level since October 2018. Italy and Germany both released weak manufacturing data with the Italian print registering the lowest in six years. A separate report showed that core inflation in the Euro-zone rose to the highest level in three months but the headline rate slowing to the weakest since April. EUR/USD traders will likely swing shift their back to the American economic docket.

GBP

The British pound fell about a half a percent against the U.S. dollar overnight as data showed British manufacturing PMI slumped amidst Brexit uncertainty. PMI fell to a three month low of 52.8, but a reading above 50 still indicates growth. Economists expected a reading of 53.5.

The Bank of England will announce their policy decision and forecasts next Thursday.