Analysis and Opinion »

Asian Session – Light profit-taking on US dollar after employment report rally

XM Markets UUIIFXBR
Share on StockTwits
Published on
www.xm.com

us-economy-shrinks-gdp-falls-01-in-q4

The US dollar faced some profit-taking following the major gains it posted during Friday’s session.  Euro / dollar was off the 1.1293 low right at the open of the session to trade at 1.1328.  January Nonfarm payrolls on Friday came in at a stronger-than-expected 257 thousand level, whereas average hourly earnings rose at their fastest monthly pace in 6 years.  This strengthened the argument in favor of the first rate hike from the Federal Reserve happening earlier rather than later.

In Greece, the new Prime Minister Alexis Tsipras, in a speech to parliament said that he was seeking to do away with the bailout agreement while servicing the country’s debts.  This set him on a collision course with his Eurozone partners as finance ministers of the single currency area will meet on Wednesday and EU leaders are convening on Thursday.  According to the Eurogroup Chairman, Greece has until February 16 to request a bailout extension.

Dollar / yen came off its Friday high of 119.21 but was trying to break through above the 119 level once more.  The Japanese current account surplus for December was lower-than-expected at 187.2 billion yen versus 355.8 billion expected.

The Australian dollar was lower after Chinese trade data disappointed.  Both imports and exports were significantly lower-than-expected, although the headline trade surplus was slightly better-than-expected because imports were more off the mark.  The aussie remained below the 78 cent level against the US dollar.  The country’s Prime Minister also managed to fend off a challenge to his leadership.

Looking ahead, Eurozone Sentix investor confidence for February will be the main news item, but the market is mostly expected to better absorb both the US employment report and the news out of Greece.

 

Share on StockTwits