10 Feb 2014
Flash: USD extends its weakness – BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, assessed the ongoing weakness around the greenback following the disappointing NFP last Friday.
Key Quotes
"The US dollar has continued to trade on a weaker footing in the Asian trading session following the release of the US employment report for January. The establishment report revealed that employment growth rebounded more modestly than expected by 113k in January following an even more modest gain of 75k in December."
"There was no clear evidence in the report that bad weather was also mainly responsible for the weaker outcome in January. As a result the report highlighted that employment growth appears to have slowed with the three month average of employment growth declining to 154k at the end of January from 201k at the end of October.
"In contrast, the household survey proved stronger than expected with employment growth continuing to play catch up expanding by 638k in January. Employment growth in the household survey has now expanded by 1.74 million over the last three months."
"As a result the unemployment rate declined by further 0.1 point to 6.6%. Overall, the non-farm payrolls report was mixed although the recent weakness in the establishment report implies a higher risk that underlying employment growth may have slowed, although that appears at odds with still robust US economic growth. The report is not likely weak enough to prompt the Fed to delay QE tapering and not weak enough to derail the ongoing rebound in investor risk sentiment which is leading to a reversal of recent safe haven driven yen gains."
Key Quotes
"The US dollar has continued to trade on a weaker footing in the Asian trading session following the release of the US employment report for January. The establishment report revealed that employment growth rebounded more modestly than expected by 113k in January following an even more modest gain of 75k in December."
"There was no clear evidence in the report that bad weather was also mainly responsible for the weaker outcome in January. As a result the report highlighted that employment growth appears to have slowed with the three month average of employment growth declining to 154k at the end of January from 201k at the end of October.
"In contrast, the household survey proved stronger than expected with employment growth continuing to play catch up expanding by 638k in January. Employment growth in the household survey has now expanded by 1.74 million over the last three months."
"As a result the unemployment rate declined by further 0.1 point to 6.6%. Overall, the non-farm payrolls report was mixed although the recent weakness in the establishment report implies a higher risk that underlying employment growth may have slowed, although that appears at odds with still robust US economic growth. The report is not likely weak enough to prompt the Fed to delay QE tapering and not weak enough to derail the ongoing rebound in investor risk sentiment which is leading to a reversal of recent safe haven driven yen gains."