Forex news for North American trade on Aug 3, 2018:
- US July non-farm payrolls 157K vs 193K expected
- China to put tariffs of 5-25% on $60 billion in US imports, implementation subject to US action
- Fitch affirms Germany at AAA with stable outlook
- CFTC Commitments of Traders: CAD shorts cut. AUD shorts hit two-year high
- Baker Hughes oil rig count 859 vs. 861 last week
- Dallas Fed Trimmed Mean PCE 2.2% annualized
- July ISM non-manufacturing index 55.7 vs 58.6 expected
- US July final Markit services PMI 56.0 vs 56.2 expected
- Kudlow: China should not underestimate Trump on trade
- Canada international trade balance for June -0.63B vs -2.30B expected
- US trade balance for June -$46.3B vs. -$46.5B estimate
Markets:
- Gold up $6 to $1213
- WTI crude down 34-cents to $$68.62
- S&P 500 up 14 points to 2480
- US 10-year yields down 4 bps to 2.95%
- AUD leads, EUR lags
Non-farm payrolls was close to estimates but on the soft side, including a downward revisions to wage data. The initial reaction was a slump in the US dollar and that continued in USD/JPY for the remainder of the day in a slow slide to 111.20 from 111.60.
The euro, however, wasn't able to take advantage. It hit tested the session high of 1.1610 after the data but could only get to 1.1608 then slowly grinded lower to 1.1565 to finish near the worst levels of the week.
Cable wasn't much better as the post-NFP rally stalled at 1.3040 very shortly after the report and then slowly sank to finish right at 1.3000 in the lowest weekly close in a year.
The Canadian dollar continued its solid run with the help of an upbeat trade balance report for the month that steel and aluminum tariffs were launched. Those sectors struggled but energy exports jumped. USD/CAD fell to 1.2984 from 1.3020.
The China trade tariff report didn't have much effect. At first it sent stocks lower but the market is confident that a trade war isn't coming, even after a report that US and Chinese officials aren't even talking. AUD/USD finished on a better note as it climbed to 0.7400 from 0.7360 in Europe.
Gold held the $1200 level and made some progress after non-farm payrolls to hit $1219 from $1205 only to dip back to $1213 late.
