US labor market report and CFTC data

Any remaining concerns about the state of the US economy which the surprisingly bad US data might have caused over the past few weeks seem to have been overcome all of a sudden. The surprisingly high May nonfarm-payrolls number provided considerable support for the US currency on Friday. 


There was a suspicion that the US labour market is driven by structural factors: i.e. is still adjusting to the post-recession structure, which takes time but is progressing regardless of whether a quarter turns out to be better or worse in terms of GDP growth, says Societe Generale. And as the Fed is mainly interested in the labour market it can see through a short setback in growth without worrying too much. 


Regardless of whether this is a good or a bad reason the labour market report will surely serve as an argument for all those who have only just entered fresh USD longs. The speculative IMM traders alone have increased USD-longs by $ 4bn over the course of one week (until last Tuesday), as Friday's CFTC data illustrates. As it was difficult to make any money with EUR shorts recently USD bulls seem to be looking for alternatives. Investors built the USD positions against other currencies. So in this sense the lower EUR-USD levels are based on more robust foundations than the levels of other G10 currencies, especially JPY.