Stellar US Jobs Report Lifts Dollar, Treasury Yields

Stellar US Jobs Report Lifts Dollar, Treasury Yields

ACY Securities logo picture.ACY Securities - Michael Moran
Feb 5, 2024

DXY Soars 0.9%, AUD, NZD Plummet; USD/JPY Jumps


An increase in US Non-Farms Payrolls, up 353,000 against economist’s estimates of 187,000 lifted the Dollar Index (DXY) 0.87% to 103.95 from 103.05 on Friday.

With the US labor market remaining tight, treasury yields lifted. The benchmark US 10-year bond yield jumped a whopping 15 basis points to 4.02% from 3.87% Friday. Two-year US rates spiked to 4.36% from 4.19%.

The Unemployment Rate for January dipped to 3.7% against expectations of 3.8%. Average Hourly Earnings (Wages) climbed 0.6%, up from 0.4% previously, and beating forecasts at 0.3%.

The Australian Dollar (AUD/USD) plummeted to 0.6507 from Friday’s opening at 0.6577. New Zealand’s Kiwi (NZD/USD) had its wings clipped, tumbling 1.3% to 0.6050 from 0.6135.

Against the Japanese Yen, the Greenback (USD/JPY) spiked in choppy trade to 148.35, up from 146.25 Friday morning. In contrast to the rise in the US 10-year yield, Japan’s 10-year JGB yield dipped to 0.66% from 0.68%.

The Euro (EUR/USD) lost ground against the Greenback, slipping to 1.0790 from 1.0870 Friday. Sterling (GBP/USD) slid to 1.2635 from 1.2745. The British currency traded to an overnight high at 1.2772 before tumbling lower.

Against the Asian and EMFX, the Dollar was mostly higher. The USD/SGD pair (US Dollar-Singapore Dollar) rose to 1.3435 from 1.3385. USD/THB was up at 35.45 from 35.25.

Wall Street stocks finished with modest gains. The DOW climbed 0.35% to 38,670 (38,475) while the S&P 500 finished at 4,955 from 4,897. Australia’s ASX 200 gained 0.45% to 7,667.

  • AUD/USD – The Australian Dollar plummeted lower against the US Dollar to 0.6507 from Friday’s open at 0.6568. Broad-based US Dollar strength following a robust rise in US Non-Farms Payrolls weighed on the Aussie Battler. The overnight low traded was 0.6502.
  • USD/JPY – Against the yield sensitive Japanese Yen, the Dollar jumped to 148.35 in late New York, up 1.17% from Friday’s open at 146.27. The strong rise in the US 10-year bond yield to 4.02% from 3.87% boosted this currency pair. The overnight low was 146.24.
  • EUR/USD – After climbing to an overnight high at 1.0897, the Euro slumped to 1.0787 in late New York trade. On Friday, the Euro opened at 1.0870. The shared currency had a volatile trading session with the low recorded at 1.0774.
  • NZD/USD – The Kiwi underperformed, tumbling over 1.3% lower to 0.6050 from Friday’s open at 0.6135. Broad-based US Dollar strength weighed on the Kiwi, also known as the “flightless bird”. In volatile trade, the overnight high recorded was at 0.6161.

On the Lookout:

The week kicks off today with a busy economic calendar. Global Services and Composite PMIs are due for release. Australia kicks off with its Judo Bank January Services PMI (f/c 47.9 from 46.9 previously – ACY Finlogix).

Australia also releases its December Balance of Trade (f/c +AUD 11 billion from +AUD 11.437 billion previously – ACY Finlogix). Japan follows with its Jibun Bank January Final Services PMI (f/c 52.7 from 51.5 previously – ACY Finlogix).

Australia releases its January ANZ Bank Job Ads (f/c 0.6% from 0.1% - ACY Finlogix). China follows with its Caixin Services PMI for January (f/c 52.9 from 52.9 – ACY Finlofix). Europe starts off with Germany’s December Trade Balance (f/c +EUR 18.8 billion from +EUR 20.4 billion – ACY Finlogix).

Germany also releases its January Final Services PMI (f/c 48.4 from 48.8 – ACY Finlogix). France releases its January Final Services PMI (f/c 45 from 45.7 – ACY Finlogx). Next up is Italy’s January Final Services PMI (f/c 50.8 from 49.8 – ACY Finlogix).

The Eurozone’s Final January Services PMI follows (f/c 48.4 from 48.8 – ACY Finlogix). The UK follows with its UK S&P Global Services PMI for January (f/c 53.8 from 53.4 – ACY Finlogix). The Eurozone releases its December PPI report (m/m f/c -0.8% from -0.3%; y/y f/c -10.5% from -8.8% - ACY Finlogix).

Canada kicks off North America with its Canadian January Global Services PMI (f/c 44.3 from 44.6 – ACY Finlogix). The US rounds up today’s data releases with its S&P Final Global Services PMI (f/c 52.9 from 51.4 – ACY Finlogix), and US ISM January Services PMI (f/c 52 from 50.6 – ACY Finlogix).

Trading Perspective:

The blowout in the US Non-Farms Payrolls report put a bid under the US Dollar after the Federal Reserve’s Jerome Powell ruled out a rate cut in March.

The US economy created a whopping total of 353,000 jobs against median forecasts of 187,000 jobs. Wages also grew more than expected.

While these numbers are subject to revisions, the large difference will keep the Greenback supported. Traders will turn their focus to today’s Services PMIs and any large discrepancies could lead to more volatility. Happy days.

  • AUD/USD – The Aussie Dollar was battered lower against the broadly based stronger Greenback to 0.6507 from 0.6577 on Friday. On the day, look for immediate support at 0.6500 followed by 0.6470. Immediate resistance can be found at 0.6540, 0.6580 and 0.6610. Look for another choppy session in the Aussie today, likely between 0.6480 and 0.6630. At current levels, prefer to buy Aussie on dips.


  • EUR/USD The shared currency finished lower against the overall stronger US Dollar to 1.0787 from Friday’s open at 1.0870. Look for immediate support today at 1.0770 (overnight low traded was 1,0774). The next support level lies at 1.0740 and 1.0700. Look for more choppy trade in the Euro today, likely between 1.0760-1.0860. Prefer to bud dips to 1.0750 today.
  • USD/JPY Against the Japanese Yen, the Greenback soared 1.17% to 148.35 in late New York, against Friday’s open at 146.27. For today look for immediate resistance at 148.60 followed by 148.90. On the downside, immediate support can be found at 148.00, 147.50 and 147.00. Look for more choppy trade in this currency pair, likely between 147-149. Trade the range, nice and wide. Prefer to sell USD/JPY rallies near current levels.
  • GBP/USD Sterling slid against the broadly based stronger US Dollar to 1.2635 at the New York close. On Friday, the GBP/USD pair opened at 1.2740. Look for immediate support today at 1.2610 (overnight low traded was 1.2613). The next support level lies at 1.2580 followed by 1.2550. On the topside, look for immediate resistance at 1.2670, 1.2710 and 1.2740. Look for the British Pound to trade a likely range today of 1.2610-1.2710. Trade the range with the preference to buy Sterling on dips.

Have a good week ahead. Happy Monday and trading all.

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.




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