EUR/USD is still above important support levels despite Fridays
Nonfarm payrolls rose by 156k jobs last month, the Labor Department said on Friday. The reading was below the market consensus of 178k, but employers hired 19k more workers than previously reported in October and November. Fed Chair Janet Yellen has said the economy needs to create just under 100k jobs a month to keep up with growth in the work-age population.
Average hourly earnings increased 10 cents or 0.4% in December after slipping 0.1% in November. That pushed the year-on-year increase in earnings to 2.9%, the largest gain since June 2009, from 2.5% in November. The unemployment rate ticked up to 4.7% from a nine-year low of 4.6% in November. Still, it remained below 4.8%, the Fed's estimate of the natural rate of unemployment, for two straight months.
December's job gains were broad, with manufacturing payrolls rising 17k after declining for four straight months. Construction payrolls fell 3k in December, likely because of cold weather, after three consecutive months of increases. Retail sector employment rose 6.3k after increasing 19.5k in November. Healthcare and social assistance employment rose 63.3k. Restaurants and bars hired 29.6k workers. Government payrolls increased 12.0k in December.
Other data on Friday showed the trade deficit widening 6.8% to USD 45.2 billion in November as imports rose to their highest level in over a year on rising oil prices.
Chicago Federal Reserve President Charles Evans said on Friday the Fed could raise interest rates three times this year, faster than he had expected just a few months ago and in line with the majority of his colleagues.
Two other U.S. policymakers, Cleveland Fed President Loretta Mester and Richmond Fed President Jeffrey Lacker, said Friday they would support even faster rate hikes.
Dallas Fed President Robert Kaplan said he supported a gradual and patient path for hikes, arguing it was too early to know whether Trump policies would boost economic growth.
The Fed raised interest rates last month by a quarter of a point and policymakers signaled they expect to raise rates three more times in 2017. Minutes from that meeting showed policymakers might signal an even more aggressive path of rate increases if inflationary pressures rise.
The EUR/USD broke above 7-day exponential moving average on Thursday and remains above this level despite a drop on Friday. This suggests that this week may bring us a corrective move on this pair, especially that there are not many events in economic calendar. The main economic release of the week is not until Friday, when retail sales figures for December are out.
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Average hourly earnings increased 10 cents or 0.4% in December after slipping 0.1% in November. That pushed the year-on-year increase in earnings to 2.9%, the largest gain since June 2009, from 2.5% in November. The unemployment rate ticked up to 4.7% from a nine-year low of 4.6% in November. Still, it remained below 4.8%, the Fed's estimate of the natural rate of unemployment, for two straight months.
December's job gains were broad, with manufacturing payrolls rising 17k after declining for four straight months. Construction payrolls fell 3k in December, likely because of cold weather, after three consecutive months of increases. Retail sector employment rose 6.3k after increasing 19.5k in November. Healthcare and social assistance employment rose 63.3k. Restaurants and bars hired 29.6k workers. Government payrolls increased 12.0k in December.
Other data on Friday showed the trade deficit widening 6.8% to USD 45.2 billion in November as imports rose to their highest level in over a year on rising oil prices.
Chicago Federal Reserve President Charles Evans said on Friday the Fed could raise interest rates three times this year, faster than he had expected just a few months ago and in line with the majority of his colleagues.
Two other U.S. policymakers, Cleveland Fed President Loretta Mester and Richmond Fed President Jeffrey Lacker, said Friday they would support even faster rate hikes.
Dallas Fed President Robert Kaplan said he supported a gradual and patient path for hikes, arguing it was too early to know whether Trump policies would boost economic growth.
The Fed raised interest rates last month by a quarter of a point and policymakers signaled they expect to raise rates three more times in 2017. Minutes from that meeting showed policymakers might signal an even more aggressive path of rate increases if inflationary pressures rise.
The EUR/USD broke above 7-day exponential moving average on Thursday and remains above this level despite a drop on Friday. This suggests that this week may bring us a corrective move on this pair, especially that there are not many events in economic calendar. The main economic release of the week is not until Friday, when retail sales figures for December are out.
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