Dollar Rallies on Non-Farm Payroll Data

The Usd rose in the European session based on better primarily on the Non-Farm payroll data, and comments by Trichet of the ECB. The EurUsd retracted from the low 1.59 level to the 1.57 price, while the UsdJpy moved from 105 to 106 based on dollar strength. The GbpUsd retreated from the 1.99 resistance level to 1.98 in response to the economic data out of the US. Equity markets are trading higher in the US and Europe, while commodities fell with oil at 144 and gold at 936. Bond yields widened in the US and Europe as traders sold off in 2yr and 10 yr securities.

The ECB hiked rates 25bps which was in line with market expectations. The Eur saw a major sell off across the G-10 particluarly against the Usd and Gbp. While the rate may have been priced in, investors were still listening intently to the tone of Trichet’s commentary. While addressing inflation as an issue, his comments were not as hawkish as usual sparing the dollar additional downside risk. News was light in the UK, as the cable fell against the dollar but moved up against the Euro. Services PMI came in lower than expected at 47.1 vs. 49.5, signaling a contraction in production for commercial businesses. While we are seeing a break in the downtrend of the cable, we shouldn’t expect this turnaround to conti

AC Markets
http://www.ac-markets.com

Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.