Daily Afternoon Report 05.02.2016

The dollar held onto gains against the other major currencies on Friday, after the release of mostly positive U.S. jobs data although uncertainty over how much the Federal Reserve will be able to raise interest rates this year continued to weigh.

The Labor Department said the U.S. economy added 151,000 jobs in January, compared to expectations for an increase of 190,000. The economy created 262,000 jobs in December, whose figure was revised from a previously estimated 292,000 gain.

The U.S. unemployment rate ticked down to 4.9% last month from 5.0% in December. Analysts had expected the unemployment rate to remain unchanged in January.

The report also showed that average hourly earnings rose 0.5% in January, compared to expectations for a 0.3% gain, after a flat reading in December.

But the dollar remained under pressure after New York Federal Reserve President William Dudley said on Wednesday that the weakening outlook for the global economy and any further strengthening of the dollar could have “significant consequences” for the health of the U.S. economy.

Earlier Friday, data showed that German factory orders fell by 0.7% in December, compared to expectations for a downtick of 0.5%, after a 1.5% increase the previous month.

Meanwhile, data showed that the number of employed people in Canada fell by 5,700 in January, disappointing expectations for an increase of 5,500 and after a revised 1,300 gain the previous month.

Canada’s unemployment rate ticked up to 7.2% last month from 7.1% in December, compared to expectations for an unchanged reading.

A separate report showed that Canada’s trade deficit narrowed to C$0.59 billion in December from C$1.59 billion in November, whose figure was revised from a previously estimated deficit of C$1.99 billion.

Analysts had expected the trade deficit to widen to C$2.20 billion in December.

In its monthly policy statement, the Reserve Bank of Australia left its November growth forecast unchanged, predicting the economy would grow at an average rate of 2.5% in 2016 and 3% in 2017.

However, the RBA underlined uncertainties in the labor market.

Separately, the Australian Bureau of Statistics said retail sales were flat in December, compared to expectations for a 0.5% rise and after a 0.4$ uptick the previous month.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.19% at 96.68, off the previous session’s three-and-a-half-month low of 96.27.