FX Week 8 September 2013

FX Week

USD steady despite payrolls disappointment

Despite some ambiguity in the US August employment report released on Friday, the USD corrected only part of the gains it had made over the week as a whole. This is probably because the 169,000 rise in non-farm payrolls, while softer than expected, was probably not weak enough to cast doubts on the likelihood of Fed QE tapering being announced next week. Even with the downward revisions to July and August, knocking a combined 74,000 jobs off previous estimates, another fall in the unemployment rate to 7.3% was probably sufficient to keep a Fed ‘tapering’ in prospect, especially in the light of other strong ISM activity reports as well as ongoing declines in weekly jobless claims.

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