EUR/usd
The US employment stats inspired optimism both of the stock and dollar bulls. Employment growth by 236K and decline of unemployment to 7.7% triggered the dollar rally. eurusd dropped from 1.3130 to 1.2950. The better than expected news ( growth by 170K was forecasted) supported the rally of the stock exchanges, which as a result demonstrated the best week of growth this year. Quite a rare thing – simultaneous growth of the dollar and stock market – has its reasons, but will hardly last for long. Demand for the US assets is also logical as this country's economy promises to demonstrate an impressive growth rate in the coming months (as we remember, there was almost zero growth in the fourth quarter). Anyway, very often growth in the USA entails improvement of investor optimism in other parts of the world, and the dollar, as a result, goes down shortly after. It's quite likely that the same picture will be observed this time. On Thursday draghi made it clear that he is optimistic about the near future of the euro zone (it's a signal that the rate won't be cut in the near future). Ben Bernanke said that he is considering keeping of assets in the Fed's balance sheet right till their maturity date. We get some kind of passive exit strategy. The annual growth rate of the average hourly earnings has been at 2.1% for three months in a row. It is a favourable result, much exceeding the inflation (the January stats showed +1.6% y/y). The only disappointing fact is that the workforce ranks keep getting thinner. For example, in February the decline made 130K. The ratio of the employed to the general number of citizens totals 58.6%. The minimum rate shown by this indicator was in November 2010 (58.2%) and the highest one – in December 2006 (63.4). This indicator clearly shows how much the US labour market has yet to go. The reassuring fact is that it is going in the right direction unlike the EU one.
GBP/USD
The British pound has hit a fresh 2 ⅟2 -year low against the dollar, having fallen to 1.4884 on the payrolls. Now we can see a certain retracement to 1.4934. There are opinions that it is still a dead cat bounce. Anyway, we still have concerns about the future of the pound. In our opinion, it is not that certain. The currency is clearly oversold, but there should be a good reason for the upward move. As we see, it was not enough to preserve the rate and the programme size in March. The initial upsurge on the news on Thursday eventually turned into the return below 1.50 in less than 24 hours, later the payrolls smashed the pound.
USD/JPY
The yen as well as the pound is now in the zone of the multiyear lows against the dollar. Now trading is held at 96.0, having risen approximately by 3 figures during the week. It's quite possible that vote on the new head of the CB will be taken today. It is rumoured that if appointed Kuroda can convene a special meeting of the committee and put an additional pressure on the yen, extending the size of the asset purchase programme.
USD/CAD
Canada again brings good news to the markets with its favourable employment statistics. The Canadian employment data released together with the US payrolls were not passed unnoticed. This country has created 50.7K new jobs (taking into account that its population makes 28.5bln against 315bln in the USA). All that helped the Canadian currency improve its positions against the US dollar despite the general rally in favour of the greenback.
