USD

The Dollar Index is on the decline this morning after having its five-day winning streak snapped yesterday. However, the Greenback remains on pace for its third consecutive weekly gain as markets react to the latest Nonfarm payrolls report. 

In July, the US economy added 187K jobs, missing market expectations and coming in below the average monthly gain over the past year. The most notable increases were observed in health care, social assistance, and financial activities.

Furthermore, the unemployment rate declined slightly to 3.5%, while average hourly earnings rose by 0.4% in July and 4.4% year-on-year –all three figures coming in better than market expectations.

EUR

The Euro is up around 0.4% on the day following the latest data out of Europe and the US as EUR/USD tries to avoid its third-straight losing week.

Eurozone retail sales fell by 0.3% month-on-month in July, a downside surprise for markets given a consensus estimate of a 0.2% rise. It was the first monthly contraction since March. However, the index fell 1.4% annually compared to an expected 1.7% drop.

Meanwhile, Germany's factory orders unexpectedly increased by 7% on a monthly basis, the sharpest growth since June 2020, driven by large-scale orders in various sectors. Still, when excluding large-scale orders, new orders declined by 2.6%.

GBP

After falling nearly 0.7% against the Dollar early in the day, Sterling found its way back from the lows and finished the day essentially unchanged. Today, GBP/USD is up 0.3% in the aftermath of this morning's US Nonfarm payrolls release.

The UK construction sector showed modest growth with a PMI of 51.7 in July, the strongest in five months, led by upticks in commercial building and civil engineering. However, residential work saw a dramatic decline from June. Meanwhile, employment in the industry saw its most significant monthly increase since October 2022, while business confidence for the next 12 months slightly improved.

JPY

The Japanese Yen is up 0.2% this morning following two consecutive winning days against the Greenback.   Despite the recent gains, the Yen is still pacing for a losing week as Wall Street checks in.

With no data on the calendar today, JPY traders will shift their focus to next week, where Japan's latest average income, current account, and producer price inflation figures are all on the docket.  

There are also two intriguing reports scheduled for release next week – the BoJ's Summary of Opinions, which will include the Bank's newest inflation and growth projections, and the Eco Watchers Survey, which assesses economic trends across various regions in Japan.

CAD

The Loonie is inching lower again today as traders assess this morning's slate of employment data out of Canada and the US. With today's moves, USD/CAD now sits around 0.85% lower for the week.

In July, Canada's unemployment rate increased to 5.5% from 5.4% in June, its highest level since January 2022, as 28K more Canadians became unemployed. This marks the third consecutive monthly rise in the unemployment rate, its worst stretch since the early days of the pandemic.

 

Additionally, the Canadian economy lost 6.4K jobs versus an expected 21K gain. On the other hand, average hourly earnings rose to 5% from the 4.2% seen in June.

MXN

Fresh off its steepest single-day loss since March, the Mexican Peso is up over 1% against the Greenback this morning following today's batch of data from Mexico and the US. 

Heading into the North American session, the Peso remains on track for its worst weekly performance since March – currently sitting more than 2.5% lower for the week.

On the data front, Mexico's car production surged by 13.2% year-on-year, posting its 15th straight month of growth, led by increased output from Nissan and Ford.  

In addition, Mexico's gross fixed investment posted a sharp increase of 4.5% in May, surprising markets, given the consensus estimate was for zero growth. From an annual perspective, investment rose a whopping 17.4%, its best read since May 2021.

BRL

The Brazilian Real is pacing towards its worst week since April, despite gaining ground against the Dollar this morning. The Real is down around 2.8% on the week versus the Greenback as the dovish BCB decision continues to weigh on BRL.

Yesterday, the latest Composite PMI read pointed to a contraction in Brazil's private sector for the first time in five months as the manufacturing sector contracted while the services sector slowed. Brazil's Services PMI dropped to 50.2 in July due to weaker new business growth. The industry continued to add jobs but at a slower pace than in June.

CNY

The Chinese Yuan is trading sideways this morning after gaining ground against the Dollar yesterday, leaving CNY on pace for a weekly loss as the North American session begins.

Earlier today, China registered its narrowest quarterly current account surplus since Q2 2021, mainly due to lower goods and secondary income surpluses. Looking at the entire first half of 2023, the current account surplus decreased by 7.7% year-on-year.

Meanwhile, the fiscal stimulus hopes that helped prop up the Yuan last week have faded. Since the initial announcement from Chinese authorities following the July Politburo meeting, concrete measures or details have yet to materialize.