• Dollar fell ahead of today’s employment report
  • Analysts expect disappointing job data
  • Swiss National Bank buying euros again
  • Canadian employment due today

The first Friday of each month at 830am EST, the Bureau of Labor Statistics releases a monthly Employment Situation Summary report.  The monthly labor report is considered to be one of the most important economic indicators because evaluating the condition of employment market is critical to gauging the overall health of the economy.

The January Employment report will be released this morning.  The market is expecting 234K new job creation, and the official unemployment rate to remain unchanged at 5.6 percent. feb-6 graph

That said, recent consumer spending, business production and investment data have been relatively weak, and correspondingly, the weekly number of Americans filing new claims for unemployment benefits has increased last month.  Moreover, falling oil prices has increased the number of planned layoffs by US businesses to a nearly two-year high as the energy industry slashed jobs.

Consequently, the US dollar fell against the major currencies except for the Japanese yen yesterday afternoon as traders sold dollars ahead of this morning’s release of the January Employment report.  Most analysts expect today’s employment report to portray a decelerating US economy instead of the one that is accelerating to a 3.5 percent growth rate as many anticipated only a few months ago.  Therefore, the dollar is at risk today of falling more.  Stay tuned.

EUR-USD traded higher yesterday but failed to breach 1.1500 overnight.  The euro rally began yesterday morning amid reports that the Swiss National Bank bought euros for Swiss francs to keep the franc from strengthening too much.

GBP-USD posted a three-week peak at 1.5251 overnight, and the pair is poised to rally higher today if the US January Employment Report disappoints the market. UK fundamentals have been looking better, particularly following the January Purchasing Manager Index releases this week, with all three sectors (manufacturing, construction and services) beating expectations.

USD-CAD is trading near 1.2445 ahead of the January Employment Report.  The market is expecting a fall of 5K jobs last month as turmoil in the resources industries takes a toll on total job growth.

AUD-USD bounced back as high as 0.7840 early this morning as a lift in oil prices and a growing speculation of Chinese central bank preparing to cut interest rates made Australian assets more attractive to overseas investors – for now.

Have a great day!