US dollar mixed after NFP miss strong ISM Service Index

November 3, 2017 03:40 PM
Busy week ends with disappointing US jobs report

The U.S. dollar is mixed against major pairs on Friday. The greenback fell when the U.S. non-farm payrolls (NFP) report showed the U.S. economy added 261,000 jobs, 50,000 short of the forecast. Despite the upward 18,000 revision to the September figures, the biggest miss was the hourly wages remaining flat. The U.S. Federal Reserve is expected to raise interest rates in December, but lack of inflationary pressure will make further tightening monetary policy more complicated.

The Reserve Bank of Australia (RBA) will publish its interest rate statement on Monday, November 6 at 11:30 pm EST. The central bank is expected to leave rates unchanged at 1.5% amid low inflation and high levels of household debt. Australian retail sales were below expectations at 0 % after two months of contraction. Retailers have cut prices to offset slowing demand and another factor to explain the lack of inflationary pressures in Australia.

The Reserve Bank of New Zealand (RBNZ) is due to publish its rate statement on Wednesday, November 8 at 4:00 pm EST. The RBNZ is anticipated to keep rates unchanged at 1.75 % . This meeting will be the first since the September elections that resulted in a Labor-led government that has made it a priority to reform the RBNZ by adding a deeper focus on employment. The NZD has depreciated after the elections as the government is seeking to reform the Reserve Bank Act. The RNBZ has an acting governor, but it is seeking to replace Graeme Wheeler whose term ended in September. The government will leave Grant Spencer as the acting governor at least until March when it could announce a new governor and introduce the reforms to the Reserve Bank Act.

The euro/U.S. dollar (EUR/USD) currency pair gained 0.03 % this week. The single currency is trading at 1.1606 in a week that was full of central bank action and economic releases. It would be hard to see that by just looking at the euro price level at the beginning of the week and compare it to the end of the week. The currency pair is almost flat near weekly lows after the Bank of Japan (BOJ), Bank of England (BoE), Federal Open Market Committee (FOMC) all meet along with the monthly US jobs reports.

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