Last week ended with a data release from the US Labor Department. According to the new report, the jobs number fell more than expected by the market, although the unemployment rate remained at a level considered full employment in Fed’s perspective. August non-farm payrolls also fell short than the estimated 217K, coming out at only 173k, with July’s numbers being revised from 215K to 245K. As for the unemployment rate, it remained the same as in July (5.1%), with a participation rate going down to 62.6%. The year-on-year earnings have a 2.2% increase rate, with a 0.3% from in August from July. Recent revisions for the previous two months brought 44k new jobs to the total figures. Usually for the month of August, revision will also bring higher numbers, the present figures having little impact over Fed’s rate decision. When talking about Fed’s balance over the rate hike, it’s important to point out that the unemployment rate – which dropped to the full employment level – favors the occurrence sooner than later.
The AUD/USD reached new 6-year lows on Friday. The major reason was the US employment figures release (previously discussed). The pair ticked down reaching 0.6927, lowest since March 2009, and closed 1.04% below the opening price at 0.6945, also marking a 4-week loss strike.
Canada’s Friday report regarding unemployment set the new rate at 6.8% from July’s previous 7%. There has been recorded an increase in the participation rate, with 12k job increase – expectations were of a 5k decline. The USD/CAD is rising slowly, but steady, reaching a daily high of 1.3289 and closing the US session at 1.3275, on the positive side with 0.73% for Friday. As more technical details, the resistance line for this pair is set at 1.3300, whilst the support is at 1.3100. Data releases from US and Canada, as well as the corrosion in oil prices, corroborated with the risk aversion sentiment, impeded the trend to push over the mentioned limits.
WTI’s (West Texas Intermediate) barrel managed to overcome on Friday the payroll-induced pullback and bounced back above the $46.00 threshold. Although the comeback, oil prices are still kept under pressure due to the uncertainty of Fed’s rate hike especially if we look at the positive data in the labor market. Despite the setback, oil prices has managed to close a second week in a row with gains.
