The US dollar fell to a 2-1/2-year low on Friday and the Aussie dollar remained 28-month highs after November’s jobs report for the US disappointed.
Despite that glum news and another surge in COVID 19 cases and deaths, Wall Street ended higher on Friday and at record levels for the S&P 500 and the Nasdaq.
The Aussie dollar remained over 74 US cents to end the week above that key level for the first time since early 2018. It was down from its highs for the day and the most recent high of 74.50 US cents reached in the middle of last week on the news about a shortfall in Brazilian iron ore exports (see separate story).
Friday’s sharp rise in iron ore prices could see the dollar jump back towards 75 US cents off the back of a 7 year plus high for iron ore.
Markets shrugged off November’s US non-farm payrolls report that badly missed expectations and focused on a flurry of positive vaccine news (which won’t have any relevance until well into 2021).
Data showed that US non-farm payrolls rose by just 245,000 jobs last month after rising by 610,000 in October. That was the smallest gain since the jobs recovery started in May.
The reported fall and jobless rate should have been larger than reported because of continuing problems with replies from respondents about their employment status.
The reported jobless rate of 6.7% was down from 6.9% in October but should have been 7.1% if the continuing anomalies in the data were fixed up.
Despite the weak jobless numbers US bond yields remain high because the dills in the markets have inflation fears. The yield on US 10 year bonds ended at 0.97%.
Bond markets are ignoring the bad news about COVID -19 infections and deaths.
For the second day in a row, the United States on Friday notched a record number of coronavirus cases in 24 hours, reaching 225,201 new infections, according to a tally by Johns Hopkins University.
In that same period, the country recorded 2,506 COVID-related deaths, the Baltimore-based university stated.
San Francisco went into a tough lockdown, California is following with a tougher regime from this week.
There are consumer and producer inflation data out next week and a fall in the headline CPI rate to 1.5% is forecast with core inflation drifting lower as well from October’s 1.6%.
The euro and Swiss franc, in contrast, had their best week against the dollar in a month.
The single European currency touched a 2-1/2-year high against the greenback on Friday, while the Swiss franc rose to its highest in nearly six years. The single currency rose to $1.2177, its highest since April 2018, and ended the week at $1.2121.
