US Dollar under Pressure After Soft Jobs Data: USD under Fire as EUR Soars

Frankfurt (Jan 13)  USD fell broadly earlier on Monday after the soft jobs data raised doubts in the minds of investors about how quickly the Federal Reserve can scale back the stimulus. GBP and CAD also revealed poor data leading to a below average performance of both currencies, leaving the Yen, Euro and other currencies as the best performers in the market.

USD

The USD traded at about 80.63 after dropping by 0.4 percent earlier on Friday as the data demonstrated that the lowest number of people, over three years, had been hired in December. While the payroll rose by 74,000, it missed the expected 200,000 by a huge margin and prompted an expected slide in treasury yields. The implied yields associated with the Fed futures also dropped as the markets have pushed the timing for the first rate hike from mid 2015 to end 2015. The result was that the USD fell to a three week low at 103.83 after a high of 105.42, on Friday. Currently the USD has steadied at about 104. However, some analysts suggest that the markets may be able to digest these big movements that took place o Friday, as Japan is currently on a holiday.

The USD/JPY pair was also down at 103.95 and this is the pair’s lowest since December 23, compared to its previous low of 104.17 at about 0.65 percent.

EUR

With the USD, GBP and CAD performing well below the average, EUR/USD was going strong on Friday by climbing at 1.3668 and moving away from its one-month low at 1.3548, as seen on Thursday. EUR can be capped at about 1.368 with a resistance level of about 38.2 percent compared to the Dec – Jan trench. The pair gained about 0.29 percent on Friday.