The USD moves sharply higher after the better than expected jobs report

Not so fast. Over the past month, the market has piled on „reversals” on the idea that the Fed will peak at 5% and the economy will turn around. Jobs are a late indicator, but apart from some soft pockets in technology and manufacturing, the softness is not widespread. $ , was certainly full of trade a month ago, but much of that has been cleaned out – especially USD/JPY – leaving the market vulnerable to today’s non-farm payrolls on the other side. The dollar rose after the numbers came in at a strong 263,000 against the 200,000 expected. The momentum was boosted by the 0.6% m/m result growth to the expected 0.3%. As the domestic survey remained soft and the hours fell, there were some warnings, but certainly no report that suggested the Fed was tightening, or at least not yet. USD/JPY rose from 13 .00 to 135.88 on the report, reversing a large decline to a 60-point gain. Elsewhere, the cable has now fallen by 96 points and the euro by 75 points. The dollar was very soft throughout the week leading up to the data release, so that triggered a relief rally. On the other hand, shares along with the SandP 500 fell by 63 points.

Ethan Andrews

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