Price action in equities today has been tepid but the US Dollar is up about 0.7% at time of writing, one of its largest daily increases in recent months. The EUR/USD cross has fallen to the bottom of a 2-week range below 1.18 and the pattern for GBP/USD has been similar. The dollar seems to have gained some impetus from today’s release of US labour market data. While the headline non-farm payroll number (1.7 million) was broadly in line with expectations, the unemployment rate fell to a lower than expected 10.2% and perhaps more importantly average hourly earnings rose 0.2% mom versus expectations of a 0.5% mom contraction. Talk of the demise of the US economy and/or Dollar seems premature.
