Non-farm payroll boosted Dollar to a 5-year high

December 8, 2014

The bullishness of US dollar continues, after the bright non-farm payroll disappointed those who were expecting the retreat of USD. The Dollar Index rose to four and a half year high 89.18. Euro Dollar refreshed the multi-year low at 1.2280 and Dollar Yen’s upward move broke the 121 mark.

The November non-farm payroll increased to 351,000 jobs, way higher than the expected 230,000 jobs, and the unemployment rate stayed at 5.8%. The wage also grew 0.4% in November; the step is fastest since June 2013. The annual wage growth also rose to 2.1%, catching the step of payroll increase. The data gives more confirming signal that the job market is solidly recovering.

On the other side, the Canadian dollar touched a five-year low on Friday as data showed the economy lost 10,700 jobs in November. The difference of economic data between these two North American nations increased the speculation that the Bank of Canada will raise their interest rates later than the Fed. USDCAD advanced to 1.1476, the highest level since July 2009 in the US session, and closed at 1.1435.

The Euro Dollar was still suppressed by the downward trendline. Also, alligator and AO show the bearishness may remain.

The rally of Dollar Yen proved the 120 level is just a psychological resistance. Although the re-election is close, traders are still betting on weaker Yen. Currently, pools showed PM Abe may probably win the election and his policies will lead the Japan in the future, but even if he loses, Yen may still be dampened due to the uncertainty of domestic politics and economy.

The Asian stock markets mixed on Friday with China market refreshed global a record of daily trading volume in one nation to almost US$200 billion. The Shanghai Composite surged 1.31% to 2938. ASX 200 also fell 0.62% to 5335. The Nikkei Stock Average was up 0.19%. Western stock markets rallied on US job data, the UK FTSE gained 0.55%, the German DAX rocketed 2.39% and the French CAC Index surged 2.21%. The S&P 500 added 0.16% to 2075. The Dow closed 0.32% higher to 17959, and the Nasdaq Composite Index gained 0.24% to 4781.

On the data front, Japan Current Account and GDP will be released at 10:50 AEDST. At midnight, Canada Building Permits will be released at 0:30.

Have a great trading day!

Anthony


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