Week in FX Americas – NFP Beat Caps A Better Week For The Dollar

The individuals who sold the loonie on the appointment of Stephen Poloz, as new Governor at the Bank of Canada got small burnt. The positive USD/CAD bounce for the unknown new banker did not last too long. In hindsight, the trigger-happy loonie bears should have probably waited until after the US non-farm payroll release to express their concerns – they would have had better bandwidth.

Friday’s US payrolls happen to only reaffirm the moderate trend and nothing out of the extraordinary despite the report being better than expected. The headline non-farm payroll print increased by +165K and combined nicely with a substantial upward revision to the previous two-months (+114K). Digging deeper and the highlight for the month of April were the gains in the private services (+185K). Retail trade jobs surprised to the upside again, rising by +29K, and business services increased by +73K. Goods producing sectors actually declined by -9K, on lower non-residential construction.

Another feature of the report showed that the workweek dipped by -0.2 hours to +34.4 hours. With this pullback, the index of aggregate hours worked fell by -0.4%, despite the rise in payrolls. Analysts indicate that a plausible explanation for the higher-than-expected NFP figures and lower-than-expected average weekly-hours is that in the implementation of the sequester, government agencies decided to furlough or give non-paid vacation to their private sector workers rather than firing them. The bigger question would be what if the government agencies had fired rather than furloughed their workers, what would have been the real impact on NFP?



* EUR Euro-Zone Retail Sales
* AUD Reserve Bank of Australia Rate Decision
* AUD Employment Change
* GBP Bank of England Rate Decision
* CAD Unemployment Rate

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell