Though there were a couple of tasty surprises in the non-farm jobs report, the dollar didn’t bite, instead giving up its morning growth against the pound and euro.
At 263k the headline non-farm number was well ahead of the 181k forecast. The unemployment rate, meanwhile, unexpectedly managed to drop from 3.8% to a 49-year low of 3.6%. Yet the fact wage growth remained unchanged at 0.2% – missing the 0.3% estimates, with the previous month revised higher from 0.1% – meant that the greenback wasn’t interested. Instead it fell 0.4% against the pound, 0.3% against the yen and 0.1% against the euro. The dollar’s downturn freed up the Dow Jones to climb 90 points, an increase that nevertheless leaves it more than 300 points lower than Wednesday’s highs.
After a slow, red-tinged morning, sterling emerged as one of Friday’s big winners. Cable’s 0.4% rise pushed it back to $1.308, having slipped under $1.30 earlier in the session, while against the euro it hit a fresh, €1.17-teasing one-month peak. The currency’s growth may be related to the local election results, one that say big losses for the Tories and Labour and significant gains for overtly pro-Remain parties like the Lib Dems and Greens.
Sterling’s rise meant that the FTSE’s midday surge was halved, the UK index having to settle for a 0.5% increase, one that left it just shy of 7400. The miners provided the brunt of the FTSE’s gains, with a healthy 2.3% climb from HSBC not hurting either.