NFP Release Showed Little Influence despite the Strong Figure

Snappy Comeback for the EUR/USD - Back to the 1.4120 Levels.

Last week’s much anticipated U.S Jobs Report didn’t bring much relief for the greenback. The USD rose sharply on last Friday, after the Nonfarm Payrolls data showed September U.S. jobs growth of 110K. However, the initially strong rally on better-than-forecast NFP figures turned into a similarly sharp sell-off for the USD. Since then, the greenback has stabilized and been trading around the 1.41 level against the EUR.
Last Friday’s Average Hourly Earnings index released at 0.4% beating expectations of 0.3%. In fact, the latest string of the better-then-expected U.S data is reducing the probability of further possible Federal Reserve interest rate cuts. Now speculators forecast that the Fed will only cut rates by 25 basis points throughout December.

Also on Friday, the Canadian Unemployment Rate was released at the lowest rate in 33 years. The Canadian Employment Change index was released at 51.1K beating expectations of 16.5K. As a result, the USD has tumbled to a record low against the CAD, falling 1.5% to the 0.9816 level, the biggest drop in 3 years.

Today the U.S financial markets will be closed due to Columbus Day. Low liquidity is expected during the New York session and the USD should continue to range trade at its low levels. During the rest of the week, there is no real market moving news expected from the U.S markets except on Friday, where the US Retail Sales along with the Consumer’s Sentiment are due to be released. Looking forward this month, the focus in the market has shifted to an upcoming meeting of finance ministers and central bankers from the Group of Seven rich nations this month and a Fed policy meeting at the end of the month.
As a whole no ground breaking movements are expected to happen this week.