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Dollar Tumbles after Weak Jobs Data

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US Equities

US Indices ended the first week of the second quarter in the negative territory as trade tariffs game between China and United States is still on the run. US stock futures rose in the Asian trading session, as the White house eased the trade war concerns on the weekend, with tweet from the President and several comments from Larry Kudlow. Kudlow repeated that they will not end up in a trade war with China and if the negotiations fail, he will support tariffs. Throughout this week, traders will be waiting for any news related to this trade war as this concern has been controlling the market moves in the preceding weeks.

USD

The Dollar index fell on Friday after the job report showed that the US economy created the least jobs in six months. The U.S nonfarm payrolls showed an increase of just 103 thousand jobs in March, failing to meet market estimation of 193 thousand. The dollar losses were limited as the wage growth rose 0.3% monthly and Fed Chairman Powell said that the Fed will likely need to keep raising interest rates to keep inflation under control. The major economic releases that are expected to affect the dollar this week are due on Wednesday. Core Consumer price index is expected to rise to 2.3% up from 2.0% and the minutes of the first meeting for Powell as a chairman will be released.

GBP

The British pound was the best performer on Friday against the US dollar, boosted by the weaker than expected jobs data. Pound traded above 1.41 for the first time in almost two weeks. The currency is still being supported by the Brexit transition deal and the expected interest rate hike by the Bank of England in May.

CAD

The Canadian Dollar continues to trade at five weeks high against the US dollar, especially after the solid gains in the Canadian job markets that was reported on Friday. Traders are still anticipating a good NAFTA deal which will boost their bullish sentiment.

Gold

Gold Prices rebounded late Friday from three weeks low, as dollar weakened after soft economic news. Gold is still trading in a big consolidation area of $1300 to $1370 due to market uncertainty.

Any negative development in the trade war between China and United States should be a support for the safe heaven.

Oil

Oil prices fell around 2 percent on Friday as woes that a trade war between China and United States could hurt the global growth which will affect the demand for oil. Oil traded below $62 per barrel for the first time in three weeks.

The most important economic events:

GMT Country Event Expectation Previous
7:30 UK Halifax House Price Index (YoY) (Mar) 2.1% 1.8%
12:15 CA Housing Starts (Mar) 220 229
13:00 EU ECB's Constancio Speaks    
14:30 CA BoC Business Outlook Survey    
16:45 EU ECB's Praet Speaks    

                                 

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

 

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