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Yen gains slightly after wages data better than expected

7/7/2017, 9:53:51 AMMarket Analysis
Yen gains slightly after wages data better than expected

The yen gained slightly in Asia on Friday after better-than-expected average cash earnings with a weak private jobs report weighing on sentiment.

USD/JPY changed hands at 113.21, down 0.01% after Japan, average cash earnings rose a better than expected 0.7%, compared with a gain of 0.4% seen. Ahead, China reports FX reserves estimated at $3.062 trillion in June.

AUD/USD traded at 0.7581, down 0.07%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.02% to 95.60.

Overnight, the dollar sank to session lows against a basket of global currencies on Thursday, after a duo of labor market reports undershot expectations, suggesting a cooling labor market.

Investor jitters about the strength of the U.S. economy came to the fore on Thursday, following the release of weaker-than-expected initial jobless claims and private sector job creation data, suggesting a possible slowdown in labor market activity.

The ADP National Employment Report showed private sector payrolls increased by 158,000 jobs last month, lower than the 230,000 positions created in May and below economists' expectations for a gain of 185,000.

In a separate report, the Labor Department said initial claims for state unemployment benefits increased 4,000 to a seasonally-adjusted 248,000 for the week ended July 1. It was the third straight weekly increase in claims.

The duo of disappointing labor market reports came ahead of data showing an improvement in non-manufacturing economic activity for June, which rose to 57.4, according to a release from the Institute for Supply Management.

Analysts had expected non-manufacturing activity to shrink to 56.5.

The pound and euro capitalized on the slump in the dollar, with the euro receiving a boost earlier in the session, after the minutes from European Central Bank’s previous meeting revealed that policymakers had discussed removing the central bank’s long-standing pledge to expand or extend its bond-purchase program.