US dollar rises as US NFP data disappoint
The Japanese yen continued weakening against the USD as tensions between the United States and Iran eased. This is even after reports claimed that Iran was responsible for the Boeing crash that happened two days ago. Iran has rejected the claim and said that it would allow Boeing to inspect the jet’s black box. Earlier today, Japan released the household spending for November. The spending declined by 2.0%, which was worse than the expected increase of 2.5%. The spending increased by an MoM rate of 2.6%, which was higher than the expected decline of 9.8%. The preliminary leading index declined from 91.6 to 90.9.
The Swiss franc declined slightly today. This was partly because of the global risks that existed earlier this week have eased. Traders also reacted to the news that the Swiss National Bank (SNB) posted a huge profit in 2019. The bank made a profit of more than $50.29 billion in 2019. About $40 billion of that profit came from its foreign currency positions. $6.9 billion of the profit came from its gold reserves. The SNB operates differently than other global central banks because it holds international assets. Meanwhile, the country reported that the unemployment rate increased slightly from 2.3% to 2.5%.
The USD weakened somewhat against the euro after the Bureau of Labour Statistics released disappointing job numbers for December. The economy added more than 145k jobs in December. This was significantly lower than the 256k jobs that were created in November. It was also lower than the 164k that traders were expecting. The average hourly earnings rose by just 2.9%, which was lower than the previous growth of 3.1%. The earnings rose by just 0.1% after rising by 0.3% in the previous month. Private NFP rose by 139k while government payrolls increased by 6k. The unemployment rate remained unchanged at 3.5%. These numbers are partly because of Boeing, which announced that it would halt the production of the 737-Max jet.
The USD/CHF pair rose today in reaction to the profits made by the SNB. This week, the pair has risen from a low of 0.9660 to a high of 0.9762. The price is above the important resistance level of 0.9744. The price is in line with the upper line of the Bollinger Bands while the RSI has moved to above the overbought level of 70. The momentum indicator has been rising too. The pair may continue to rise although this could change if tensions rise.
The USD/JPY pair continued the rally that was started on Wednesday. The pair has moved from a low of 107.64 to today’s high of 109.65. This is slightly below the important resistance level of 109.70. The price is above all the short and medium-term moving averages. It is also above the Ichimoku Kinko Hyo cloud while the RSI has continued to remain above the overbought level of 70. The pair may experience a pullback during the American session or in the coming week.
The EUR/USD rose today as traders reacted to the relatively weak NFP data. The pair rose to a high of 1.1110 from the day’s low of 1.1085. The pair has been in a downward trend since December 31, when it tested a high of 1.1238. The price is slightly above the 14-day and 28-day moving averages. Still, on the hourly chart, the pair is in a strong downward trend. This means that there is a likelihood that the price will resume the downward trend.