How do wages matter!

What spoiled nonfarm payrolls!

Britain's Education Department has made its long-awaited announcement on exclamation mark policy and it is a curious one. Seven-year-olds will in future only earn points for using them in sentences beginning in "What" or "How". So "Look out!" is out: "How long is a piece of string!" is in.

On Friday afternoon, before the DfE issued that directive, the hows and whats were more interrogative than exclamatory. The ones on most investors' minds were "how come US average earnings fell even with unemployment at an eight-year low?" and "what's more important; strong jobs growth or weak earnings growth?" Sterling has been facing the conundrum for months, if not years, but this was the first time it had troubled the dollar in recent times.

The nonfarm payrolls data themselves were decent enough, with the 242k jobs added in February easily beating the forecast increase of 190k. Another 30k jobs were also added by revisions to the figures for December and January. But investors were perturbed by the fall in average weekly hours from 34.6 to 34.4 and by the -0.1% monthly decline in average hourly earnings. On balance they decided the numbers were a contraindication to a Fed rate increase and they sold the dollar.

How did the data affect other currencies!

With no better idea to go on, investors fell back on the tried-and-tested logic that any postponement to a US rate increase is positive for commodity-related currencies and negative for the safe-havens. The South African rand won the day and the Swiss franc came last.

The rand's 1.1% rise and the 0.7% by which the Norwegian krone strengthened were the biggest moves of the day. The Commonwealth dollars did not do so well, with quarter-point rises for the Loonie and the Kiwi and a half-cent gain for the Aussie. The franc lost three quarters of cent and the Japanese currency was down by just a third of a yen although it was the biggest loser for the week overall, falling by -3.1%. Sterling was unchanged against the euro and it added half a US cent.

The US employment data dominated Friday's session. Investors showed no interest in the North American trade figures and seemed unworried by the sharp fall in Canada's Ivey purchasing managers' index, from 66.0 to 53.4.

What is on Monday's agenda!

Investors will not be overwhelmed by economic statistics today. There is nothing on the list with any obvious potential to move exchange rates.

German factory orders, released ahead of London's opening, fell by -0.1% in Jan. The number might not look too clever but it was better than the predicted -0.5% decline. Italian producer prices will count for little and Norwegian manufacturing output will matter less than the 5% by which oil prices have risen since Friday morning.

There are no useful North American data to come. For heavyweight ecostats investors will have to wait for tonight's Chinese trade figures and Japanese GDP.