USD/JPY surges on positive US jobs momentum

FXStreet (London) - USD/JPY has rallied strongly on reassuring initial jobless claims numbers. While the numbers have no influence on tomorrow’s non-farm payroll statistics, they still give some positive relief to the labour market outlook. Tomorrow’s non-farm payrolls are expected to print at 185k, up from December’s weak 74k result.

Initial claims for state unemployment benefits fell by 20k to a seasonally-adjusted 331k, according to the US labour department. Claims fell further than the consensus expectation of 335k.

US trade deficit widens

The Commerce Department announced that the US trade deficit increased 12 percent to USD38.7bn in December as exports recorded their largest decline since October 2012.

The trade gap rose to USD49.5bn in December from USD45.0bn in November. Exports dropped 1.8 percent to USD191.3 bn. Imports increased by 0.3 percent to USD230.0bn.

USD/JPY rallied strongly from a session low of JPY101.2605, surging to a high of JPY101.9950. The pair is currently trading at JPY101.8675, up 0.38 percent on the session.

Flash: Non Farm Payrolls outcomes to trade - RBS

Strategists at RBS explained an outperformance in US payrolls, particularly if paired with an upward revision to December payrolls and/or a drop in the unemployment rate, should keep the pressure on EM – we like short USD/ZAR on a very strong print. On a disappointment, a decline in short-term US short-term interest rates and the USD may give a reprieve to Emerging Markets. Softening growth indicators should reinforce the Fed's commitment to providing lower for longer and enhance the credibility of its forward guidance.
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USD/CAD supported on 1.1060

USD/CAD is back onto the mid 1.10 supporting zone.
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