Dollar Falls as Stocks Soar on Rosy Jobs Report

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Dollar Falls as Stocks Soar on Rosy Jobs Report

The U.S. dollar fell overnight as global equities gained ahead of this week’s most important fundamental release.

Overview

It’s jobs day! And the data did not disappoint.  June payrolls increased by 4.8 million jobs which allowed the unemployment rate to fall from 13.3% to 11.1%.  The print beat estimates of an additional 3.2 million jobs. As a result of the rosy headlines, stocks are extending their gains and putting further downward pressure on the greenback.

The print needs to be taken with a grain of salt, however.  As Tempus Chief Economist Dr. John Min reminded during a webinar yesterday, the U.S. Bureau of Labor Statistics misclassified 5.5 million job losses in last month’s number meaning the effective unemployment rate is much higher.  The quality of the data has also been called into question. BLS included another note on the classification error today. To request a recording of the webinar, please email marketing@tempusfx.com

Later this morning, durable goods and factory orders will cross the wire and round out this week’s fundamental data.

While most markets are closed tomorrow, currency markets will be open.  Tempus will be open with shortened hours.

What to Watch Today…

  • Durable Goods at 10 a.m.

Complete Economic Calendar can be found here.

EUR

The Euro pushed higher against the U.S. dollar and touched a one-week high.  Some analysts have pointed to positive news related to supplies of the antiviral drug remdesivir as a reason for the pop higher.  But it is more likely the result of simple risk-on trading and lessening demand for the safe-haven greenback.

CAD

Commodity-based currencies from the Norwegian krone to the New Zealand dollar all rose against the U.S. dollar as commodity prices shot higher.  The krone was the biggest winner overnight, gaining over 1.%.

The Canadian dollar was the expectation as USD/CAD held mostly tight ranges.  However, widespread dollar weakness following an impressive jobs print is allowing the loonie to begin gaining.

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