All eyes are on the nonfarm payrolls out this morning after the Federal Reserve called the economy “strong” earlier this week – the first time stated since 2006. The dollar gave back some gains as the NFP for July came out lower than expected. The pound is still recovering from a dovish BoE hike and Carney’s comments.
Nonfarm payrolls dip, but show steady market
The anticipation around this morning’s U.S. labor market report was slightly elevated after the Federal Reserve delivered an optimistic monetary policy statement Wednesday.
Friday’s numbers show a steady labor market. However the headline nonfarm payrolls missed expectations of adding 190,000 jobs in July, instead coming out at 157,000 jobs added. The June figure, however, was revised to 248,000 from 213,000.
The dollar initially dropped on the report. EUR/USD ticked up from 1.159 to 1.160. GBP/USD increased slightly, but Brexit woes are weighing on the pound. The USD/CAD pair fell from 1.308 to 1.298.
The average hourly earnings for July remained at 2.7% growth year over year, showing a healthy market. And unemployment stayed at the historic low of 3.9%.
With numbers like that, there is nothing from this report that will stop the Federal Reserve from raising rates in September.
Carney concerned over Brexit
The pound took a hit yesterday from the dovish BoE rate hike, but then comments from bank Governor Mark Carney have the pound staying in a steady range.
On Friday, Carney said the chances of the U.K. dropping out of the European Union without a deal are “uncomfortably high.” Carney expressed his opinion that a disorderly Brexit is highly undesirable. But he also added that the a no-deal Brexit is unlikely.
The pound slipped below 1.30, spending most of the morning there until the nonfarm payrolls.
China plans tariffs on $60B in US goods
China has said that it will enact duties on $60 billion worth of U.S. goods if the Trump administration follows through on its latest set of tariffs.
The Chinese tariffs range from 5% to 25% on more than 5,000 types of goods.
The retaliation is after the U.S. confirmed that President Trump asked U.S. Trade Representative Robert Lighthzer to increase the tariffs on $200 billion worth of Chinese goods to 25%.
The latest move by the Chinese government indicates that the global trade tensions aren’t slacking any time soon.