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FX TALKING POINTS:

  • USD/JPY[1] Continues to Carve Bearish Series Following Dismal Non-Farm Payrolls (NFP) Report.
  • NZD/USD[2] Outlook Hinges on Reserve Bank of New Zealand (RBNZ) Interest Rate Decision.
Image of daily change for major currencies

The U.S. dollar[3] fails to benefit from the Non-Farm Payrolls (NFP) report as the updates fall short of market expectations, with USD/JPY at risk for a larger pullback as a bearish series takes shape.

Looking ahead, attention turns to the Reserve Bank of New Zealand (RBNZ) interest rate decision on tap for May 10 as Governor Adrian Orr hosts his first meeting, and a mere attempt to buy more time may drag on NZD/USD as the central bank appears to be on track to retain the record-low cash rate throughout 2018.

USD/JPY CONTINUES TO CARVE BEARISH SERIES FOLLOWING DISMAL NON-FARM PAYROLLS (NFP) REPORT

Image of daily change for USDJPY

USD/JPY slips to a fresh weekly-low (108.65) as updates to the U.S. Non-Farm Payrolls (NFP) report dampen bets for four Fed rate-hikes in 2018, and the pair may continue to give back the advance from the previous month as it carves a series of lower highs & lows.

Beyond the 164K expansion in job growth, the downtick in the Labor Force Participation rate paired with the unexpected slowdown in Average Hourly Earnings[4] dampens the Federal Open Market Committee’s (FOMC) scope to expand the hiking-cycle as the developments highlight ongoing slack in the real economy.

Image of Fed Fund Futures

As a result, the Fed may tolerate above-target price growth for the foreseeable future as the central bank pledges to ‘carefully monitor actual and expected inflation developments relative to its symmetric inflation goal,’ and Chairman Jerome Powell and Co. may continue to project

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