NFP didnt just come in below expectations it was quite abysmal which should have the Fed thinking whether all the hawkish comments were just a bit early. If Fed is data dependent then I would suspect the hike will now not come until after the election in September or perhaps even a bit later if data does not show vast improvement.
Whilst NFP was expected around 158+ it only came in at 38+. The employment rate dropped to 4.7% however this was on the back of a much lower participation rate thus more negative news.
Given the market was quite short the reaction saw the shorts scrambling for cover with most currencies up over 100bps and significantly more in case of Yen.
This week we should see further upside to the currencies however just be aware on the higher yielding currencies that the market can interpret as bad news is bad and therefore after the short squeeze play is over a retracement to the downside may come into play. Specifically on the aussie where the minutes of the upcoming RBA meeting will be important to see whether they are on hold for a while, to let the recent cut and other measures play out, or they are still very dovish. The former should help boost the aussie over 74 and up toward 75 whilst the latter could see the aussie fall back down toward 7270, in the near term.