Daily FX strategy for USD 04/07/2014 06:12:00

Quotes from Lloyds Bank:

-With the US on holiday, major movement is unlikely but there may be some aftershocks from yesterday's employment data. The continued strength of employment growth is certainly some indication of a tightening of the labour market, as is the decline in the unemployment rate to 6.1%, but the fact that average hourly earnings growth remains little changed at 2.0% doesn't suggest that the Fed will feel the need to react urgently to the latest numbers. Nevertheless, US front end yields did rise in response to the data, and 2 year EUR/USD forward points moved to the highest level since August 2012.

-Of course, as the chart shows, the correlation of forward points with EUR/USD has weakened this year, but the new high nevertheless suggests that pressure is more likely to be seen on the bottom of the recent range at 1.35 than the top at 1.37. We continue to see more potential for USD gains against the CHF than the EUR, as the recent dip in EUR/CHF owes more to the unwinding of long USD/CHF positions than any genuine rationale for CHF strength.