· The U.S. dollar weakened on Friday after data for September showed jobs gains that fell short of expectations while wages increases slowed on an annualized basis during the month, easing concerns about a large run-up in inflation.
Investors have been watching for indications that wages may rise at a faster pace as companies, including Amazon, raise minimum wages.
Still, the data was seen as solid and supportive of the Federal Reserve continuing to tighten monetary policy.
· The dollar reversed direction several times before settling at lower levels after the data. The dollar index fell as low as 95.516, from around 95.770 before the data, before rising back to 95.678.
· The euro hovered at $1.1525 EUR=, having bounced only modestly from its recent six-week trough at $1.1462.
· The dollar was holding at 113.70 yen JPY= after topping out at 114.55 last week, the highest since November last year. Chart resistance around 114.70/75 remains a major barrier.
· Sterling edged up to $1.3126 GBP= amid speculation Britain was moving nearer to an exit deal with the European Union.
· U.S. job growth slowed sharply in September likely as Hurricane Florence depressed restaurant and retail payrolls, but the unemployment rate fell to near a 49-year low of 3.7 percent, pointing to a further tightening in labor market conditions.
The Labor Department’s closely watched monthly employment report on Friday also showed a steady rise in wages, suggesting moderate inflation pressures, which could ease concerns about the economy overheating and keep the Federal Reserve on a path of gradual interest rate increases.
Nonfarm payrolls increased by 134,000 jobs last month, the fewest in a year, as the retail and leisure and hospitality sectors shed employment. Data for July and August were revised to show 87,000 more jobs added than previously reported.
The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population.
The drop of two-tenths of a percentage point in the unemployment rate from 3.9 percent in August pushed it to levels last seen in December 1969 and matched the Fed’s forecast of 3.7 percent by the end of this year.
Average hourly earnings increased 0.3 percent in September after a similar rise in August. With September’s increase below the 0.5 percent gain notched during the same period last year, the annual rise in wages fell to 2.8percent from 2.9 percent in August, which was the biggest advance in more than nine years.
· Brexiteers warned UK Prime Minister Theresa May on Sunday night that she could keep Britain within European Union customs arrangements only until 2022, The Times reported on Monday.
The newspaper added that leading Conservative Leave figures said they were prepared to give May room for manoeuvre but that any extension could run only until the next election in 2022.
· Japan would welcome Britain “with open arms” into a Trans Pacific trade pact, Prime Minister Shinzo Abe told the Financial Times on Sunday.
· North Korean leader Kim Jong Un and U.S. Secretary of State Mike Pompeo agreed to arrange a second leaders summit “as soon as possible,” and discussed potential U.S. monitoring of Pyongyang’s steps toward denuclearization, South Korea’s presidential office said on Sunday.
Pompeo said his latest, fourth trip to Pyongyang was “another step forward” to denuclearization and he had a “good, productive conversation” with Kim, but more needed to be done.
· Crude futures steadied on Friday after climbing to four-year highs earlier this week, and both Brent and U.S. crude marked weekly gains ahead of U.S. sanctions on Iranian oil exports.
U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 1 cent to settle at $74.34 a barrel.
Global benchmark Brent crude LCOc1 futures for December delivery fell 42 cents to settle at $84.16 a barrel. On Wednesday, Brent hit its highest price since late 2014, at $86.74.
WTI’s weekly gain was about 1.3 percent; Brent’s was around 1.4 percent.
Reference: Reuters
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