EUR/usd
The published employment statistics showed that the warning signals of other indicators earlier last week had been absolutely correct. According to the latest labour market report the number of jobs in the USA grew just by 88K against the expected 190K. In line with the recent correlations the US dollar was falling on the poor stats. The single currency went above 1.30 at some point, which had been last seen only on March 25. Now the euro is trading slightly below this level – at 1.2990. In the meantime, the US exchanges were in correction. Maybe it is too early to speak about it, but it again looks as if the activity in the USA started to subside at the end of spring as in the last three years. Another indicator – the unemployment rate – has gone down to 7.6%, but there's little to be happy about. The decrease happened due to the increase in the share of the inactive population. America lacks young educated professionals, while the need for low-qualified human resources is getting less strong due to automation of production. Unfortunately, more and more elderly Americans get out of demand due to their lack of up-to-date skills. Thus, the US labour market seems to be shifting from the issue with few jobs to the issue with insufficient number of highly-skilled professionals. And this is despite the fact that the US labour market is regarded as the most flexible in the developed countries. Speaking about the forecasts, Friday's employment report put an end to the hegemony of the dollar as a currency with positive economic indicators. Perhaps, the further news won't be as bad as this one, anyway investors are sure to get more cautious about further purchases of the dollar, while some of the Fed's hawks are very likely to hold their tongues now.
GBP/USD
Last week's performance of the British pound was not too bad. First of all, the MPC didn't take up a decision to extend the QE (analysts hadn't expected this, but traders heaved a sigh of relief). And secondly, Friday's report on the US labour market was a big blow for the dollar, so big that the British Old Lady managed to break through the important resistance at 1.5260, from which it had often fallen before. Friday's high of gbpusd was 1.5360, though now we see some signs of correction and the sterling has sunk down to 1.5320.
USD/JPY
With the Japanese yen it's all pretty clear. usdjpy grew to 97.50 on the payrolls and flew even higher, to 98.80, as the week opened. Against such a background the crosses with the euro and pound flew into the space, above 128 and 151 respectively. For almost three days the yen lost about 7%. Such big moves will hardly pass unnoticed by other CBs.
USD/CAD
On Friday Canada also published its employment statistics. The data proved to be utterly disappointing. The labour market shrank by 54.5K of jobs. But the most grievous thing is that 54K of them is made up by the people with full-time employment. The unemployment level is again back at the levels of the end of the previous year. Apparently, the economy will again feel difficulty with growth in the coming months. The Loonie, as a result, proved to be weaker even than the dollar and usdcad grew to 1.0233 at some point, though now has retraced to 1.0170.
