The U.S. dollar is mixed against majors after staging a comeback late in the week. The USD regained some ground even though the biggest indicator in the market the U.S. non farm payrolls (NFP) report disappointed by adding less than the expected number of jobs (156,000 versus 180,000) but the data point that had more significance was the low pace of growth of wages at 0.1%. A third rate hike for U.S. interest rates could be pushed back to next year if inflation does not pick up convincing the Federal Reserve.
The official U.S. monthly non-farm payrolls report will be released on Friday, Sept. 1. Due to the fact that some of the key leading indicators will be released after the NFP, it is even more difficult to predict this month's headline figure with any reasonable degree of confidence.
The euro’s minor recovery on the back of stronger-than-expected Eurozone inflation data this morning last only a few moments. After climbing to above 1.19 on news of an unexpectedly sharp 1.5% year-over-year rise in August CPI, the euro/U.S. dollar currency pair then tumbled 50 pips after Reuters reported, citing an unnamed source, that the European Central Bank is growing worried about the recent strength of the euro and that this may increase the chance of a delay or call for a more gradual exit from the asset purchases program.
From being one of the strongest to one of the weakest currencies in space of two days. That’s right, the euro is actually falling for once. The single currency is partly lower because of the drop in the euro/U.S. dollar (EUR/USD) currency pair exchange rate as the dollar firms up across the board thanks to short covering and positive surprise in U.S. data.
“Sell volatility, buy the dip” has been the investor mindset for some time when it comes to the equity markets. It appears that this mindset is holding firm, after investors brushed away the market uncertainty that was created in the early hours of Tuesday morning, following the news that North Korea fired a missile over Japan.
Following big falls in some risk-sensitive assets on the back of North Korea tensions, a number of global stock indices and dollar currency pairs ended the session with impressive reversal-looking technical patterns as the dip buyers evidently stepped in to take advantage of the lower prices (see the technical outlook section below).
The U.S. dollar’s selling had paused ahead of Jackson Hole Symposium last week, but then it accelerated again. That was until earlier this morning as since then the dollar has made a small comeback against a number of her rivals due above all to profit-taking. The greenback fell sharply on Friday after Janet Yellen, the Federal Reserve Chairwoman, remained tight-lipped about the future path of U.S. monetary policy.
The U.S. dollar is lower against most majors as the central bank summit in Jackson Hole kicked off. The Euro has regained January 2015 levels on Friday. Fed Chair Janet Yellen, in what could be her last appearance at the Wyoming gathering as chief of the U.S. central bank, focused on financial regulation with limited comments on monetary policy.