Dollar slips towards 100 yen ahead of jobs reports; Oil slumps by 5%

The US dollar came under pressure in Asian trading on Friday ahead of the all-important non-farm payrolls report out of the US later today. The June report is the first since the UK referendum to leave the EU and follows an unexpectedly weak report in May.

Most analysts expect a strong rebound in June, which should help support the greenback. But in the meantime, the dollar remained confined below 101 yen and hit an earlier low of 100.24 yen.

The pound firmed slightly in today’s Asian session but was stuck below 1.30 dollars. Sterling’s gains were capped by a special post-Brexit consumer sentiment survey carried out by GfK. The survey showed consumer confidence in the UK fell to -9 in the period from June 30 to July 5 from -1 in the previous period.

The pound was flat against the euro and the yen after the data at 0.8567 per euro and 129.95 yen.

There was no relief for the yen on the week’s last day of trading as the Japanese currency continued to draw safe-haven demand on persisting risk aversion. There was little reaction to Japanese trade and wage data out earlier today.

Japan’s current account surplus fell slightly to 1.81 trillion yen in May but the figure was higher than estimates. Pay growth remain muted as real wages were up 0.2% year-on-year in May, down from 0.4% in April. But total cash earnings fell by 0.2% during the same period and was the first fall since June 2015. This raises expectations that the Bank of Japan will announce fresh stimulus measures at its July meeting.

The euro moved modestly higher against the dollar to climb to 1.1089 dollars from yesterday’s low of 1.1052 dollars. It eased slightly in late Asian session though from worse-than-expected German trade data. Exports from Germany fell by 1.8% month-on-month in May, missing estimates that they would grow by 0.3%.

The New Zealand dollar extended its gains in Asian trading today, hitting a two-week high of 0.7276 against its US counterpart. The kiwi was boosted on Thursday after fresh concerns by the Reserve Bank of New Zealand on the overheating housing market dampened expectations of a rate cut in the coming months.

Crude oil prices fell sharply yesterday, with WTI and Brent crude slumping by around 5%. The sell-off came after US crude oil inventories fell by slightly less than forecasts according to the US Energy Department, which was in contrast to the API data a day earlier that indicated a sharper drawdown. US oil futures were attempting a recovery on Friday and were last trading 0.9% higher at $45.58 a barrel.

Coming up later today, UK trade figures will be the main data in the European session but all eyes will be on the US non-farm payrolls report which is due at 12:30 GMT. Also released today are Canada’s jobless figures.