US: Disappointing jobs data don't break the buck - BBH

Research Team at BBH, suggests that the US dollar showed an unexpected resilience to the disappointing August employment data. 

Key Quotes

“The dollar's resilience in the face of the jobs data may reflect the fact that many feel the report did not alter investors' or policymakers' information set.  It did not sway opinion very much for or against a move.  There is not much market-moving data from the US next week outside of the ISM non-manufacturing report.

Investors should not expect much guidance by Fed officials either as the Troika of Yellen, Dudley and Fischer do not have public appearances this week.  On the other hand, the ECB, Reserve Bank of Australia, and the central banks of Canada and Sweden meet.  Only the ECB's meeting is seen as live, with the other central banks seen on hold.  The ECB may extend its asset purchases beyond March 2017 and may have to tweak its self-imposed restrictions on what it is buying to minimize the disruption.

The US Dollar Index slipped to new lows for the week.  That low just below 95.20, which is also the 100-day moving average, completed a 50% retracement of the rally that was spurred by Yellen’s and Fischer's comments from Jackson Hole on August 26.  The 61.8% retracement is found near 95.00.  Initial resistance is seen near 95.85, but it will take a break of this week's high of almost 96.25 (which also corresponds to the 200-day moving average) to signal a resumption of the dollar's advance.”