USD

The US dollar closed Friday on a weak note because the US non-farm payrolls report printed weaker than expected results.

The actual figure came in at 113K versus the estimate at 180K, following December’s dismal jobs data. However, the jobless rate ticked down from 6.7% to 6.6% in January, mostly because of a decline in the participation rate. Traders are starting to price in dovish remarks for Yellen’s first testimony in front of Congress this week. There are no major reports due from the US today so the post-NFP reaction of the dollar might carry on.

EUR

The euro had a nice rebound on Friday, thanks to better than expected medium-tier data from Germany and France. The shared currency also took advantage of dollar weakness after the bleak NFP release. The German trade balance showed a higher than expected surplus of 18.5 billion EUR versus the estimate at 17.3 billion EUR while the previous period’s figure was revised higher. The French trade balance also printed good results, with a smaller than expected trade deficit. French and Italian industrial production figures are up for release in today’s London session, along with the euro zone Sentix investor confidence report.

GBP 

The pound was able to bounce off its previous lows on Friday, although UK reports came in mixed. Manufacturing production increased by 0.3%, weaker than the estimated 0.6% growth, while the previous month’s figure was revised down to show a 0.1% decline. However, the trade balance turned out better than expected with a smaller shortfall of 7.7 billion GBP instead of the estimated 9.3 billion GBP deficit. There are no reports lined up from the UK today so the pound might be in for a bit of consolidation.

CHF The franc was able to benefit from dollar weakness last week, as USD/CHF edged back to the bottom of the rising channel on its short-term time frames. Data from Switzerland has actually been weaker than expected, with a mere 2.3% increase in retail sales versus the estimated 3.9% gain and an increase in foreign currency reserves. The Swiss jobless rate is up for release today and a 3.2% figure is eyed, same as the previous month’s reading.

JPY

The yen lost ground to its major counterparts on Friday as risk appetite improved in the earlier sessions. However, volatility for USD/JPY picked up when the US NFP figure was released, although the yen still ended the day with losses. Earlier today, Japan printed a weaker than expected current account balance of -0.20 trillion JPY versus the estimated 0.06 trillion JPY shortfall. No other reports are lined up from Japan today so risk sentiment might push yen pairs around.

 Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to rake in more gains to the dollar on Friday, with the Loonie and Kiwi both ending up successful. Jobs data from Canada was better than expected, as the economy added 29.4K jobs in January and pushed the jobless rate down from 7.2% to 7.1%. Canadian housing starts are up for release today and another strong figure might push USD/CAD to new lows. No reports are due from Australia and New Zealand today.

By Kate Curtis from Trader’s Way