Week in FX Americas – NFP Beat Caps A Better Week For The Dollar

The individuals who sold the loonie on the appointment of Stephen Poloz, as new Governor at the Bank of Canada got small burnt. The positive USD/CAD bounce for the unknown new banker did not last too long. In hindsight, the trigger-happy loonie bears should have probably waited until after the US non-farm payroll release to express their concerns – they would have had better bandwidth.

Friday’s US payrolls happen to only reaffirm the moderate trend and nothing out of the extraordinary despite the report being better than expected. The headline non-farm payroll print increased by +165K and combined nicely with a substantial upward revision to the previous two-months (+114K). Digging deeper and the highlight for the month of April were the gains in the private services (+185K). Retail trade jobs surprised to the upside again, rising by +29K, and business services increased by +73K. Goods producing sectors actually declined by -9K, on lower non-residential construction.

Another feature of the report showed that the workweek dipped by -0.2 hours to +34.4 hours. With this pullback, the index of aggregate hours worked fell by -0.4%, despite the rise in payrolls. Analysts indicate that a plausible explanation for the higher-than-expected NFP figures and lower-than-expected average weekly-hours is that in the implementation of the sequester, government agencies decided to furlough or give non-paid vacation to their private sector workers rather than firing them. The bigger question would be what if the government agencies had fired rather than furloughed their workers, what would have been the real impact on NFP?

• NFP Results US Payrolls Rise by 165,000
• U.S. Auto Industry Enjoys Best Performance in 20 Years
• Low Bar Set for US NFP Today
• Stephen Poloz Named New Bank of Canada Governor
• US Jobless Claims Fall to 5 Year Low
• Fed Continues Asset Purchasing Program
• International Investors Loving US Securities Once More
• Fed FOMC Keeps QE and Rate Intact
• U.S. Dollar Drops on Weak Data as Fed Meets
• USD/CAD Below 1.01 as Canadian Economy Expands
• U.S. Dollar Remains Lower Versus Majors Before Fed Meeting
• US Consumer Demand Cools
• US Consumer Spending Rises in March
• US Dollar Index Falls Before Fed Policy Meeting and Spending Data

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