this may be the sign of further dollar strengh into next week!!!

Dollar's sharp broad based rally extends further today with the support of weakness in commodity prices. Gold breaches $860 level briefly and remains weak. Crude oil also dives to as low as 117.36 and is set to test this week's low of 117.11. Commodity currencies remain the biggest losers today with bearish rate expectation on RBA and RBNZ. Further pressure is seen in the Canadian dollar after the release of much worse than expected Jun employment report. Note that as we mentioned earlier, both EUR/USD and GBP/USD takes out some important support levels today which signals more medium weakness to come.

Canadian employment report showed unexpected sharp contraction in the job market by -55k versus expectation of 5k growth. Unemployment rate indeed dropped 10 basis point to 6.1% but that was mainly due to a number of youth left the labor force. US Q2 productivity rose 2.2%, labor cost rose 1.3%, both below expectation. Released earlier Japanese economic watch DI dropped mildly to 29.3 in Jul. Swiss unemployment rate was unchanged at 2.3% in Jul.