NY Open: Dollar rebounds on strong payrolls
Summary: Unexpectedly buoyant US employment data, as well as the possibility of a renewed US/China trade dialogue, have helped the greenback recover most of yesterday’s losses.
USDCAD jumped from 1.3057 to 1.3107 due to the better than expected US employment data and the “so-so” Canadian report. The Canadian Labour Market survey showed a gain of 11, 300 jobs, marginally beating the 10,000 that was forecast. However, short-term downtrend resistance at 1.3110 capped the rally.
Wall Street opened with a mixed tone. The Dow Jones Industrial Average (DJIA) and the S&P 500 opened with small gains while the Nasdaq is weighed down by a 5.17% drop in Apple shares.
The US midterm elections, the possibility of a renewed US/China trade dialogue, and the Federal Open Market Committee meeting will be the focus for markets next week. The Democrats are hoping to surf a “Blue Wave” to a House of Representatives majority, and the latest polls suggest they have an 81.7% chance of getting a majority. Nevertheless, Democrats are well aware that had the polls been correct in November 2016, they would be in the President Hillary Clinton era.
A Democrat House majority would be bad for Trump if they initiated impeachment proceedings. It would be bad for the US dollar if they demand a roll-back to tax cuts.
The FOMC meeting on November 8 may not be a complete snoozefest, but it will be a non-event. There isn’t even a press conference.
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