• Home ::
• Fundamental ::
• Market View

• Send
• Print
• Add To
• Rss

Daily U.S. Forex Summary

The US dollar was mostly flat against a basket of currencies

Fri, Sep 5 2008, 05:48 GMT
by Union Bank of California Team

Union Bank of California

The US dollar was mostly flat against a basket of currencies. The dollar initially weakened against most major currencies after private-sector jobs and jobless claims data was released, but soon erased any losses as dealers digested interest rate decisions from the European Central Bank and the Bank of England. This morning, data of US workers filing new jobless claims benefits jumped by 15,000 last week and a report from ADP Employer Services showed that US private-sectors cut 33,000 jobs in August, indicating a weakening labor market.

The euro initially strengthened against the dollar after ECB President Jean-Claude Trichet announced to keep interest rates at 4.25 %. The decision to keep rates unchanged came as little surprise to many market participants. At a press conference soon after, Trichet indicated that the euro zone was going through an episode of weak economic activity which led the euro to erase any gains against the dollar.

The Sterling remained fairly unchanged against the dollar after the Bank of England announced to keep interest rates on hold at 5.0 %. Some investors anticipated a rate cut due to tumbling prices of homes, rising unemployment and rock-bottom consumer confidence. With inflation more than double the central banks targeted 2 % many were not surprised by the BoE’s decision to keep rates on hold.

The Japanese yen remains flat against the dollar as investors continue to digest the abrupt resignation of current Prime Minister Yasuo Fukuda. As the search for the new prime minster continues, the Japanese economy faces fears of recession and ballooning public debt to neighboring China.

The Canadian dollar strengthened against the US dollar as crude oil prices rose. Although Hurricane Gustav did little damage to US refineries in the gulf, 11 refineries representing 11 % of US fuel supply remain shutdown, and concerns over US oil supplies rose on the heels of Hurricane Ike brewing in the Atlantic to a category 4.

The Australian and New Zealand dollar weakened against the US dollar as investors continued to unwind their carry trade, shying away from riskier investments. A data released by Australia showed a trade deficit in July, even though a small surplus was forecasted.

Published on  Fri, Sep 5 2008, 05:48 GMT

Archive

• The US dollar was mostly flat against a basket of currencies
  Published On Fri, Sep 5 2008, 05:48 GMT
• The US dollar strengthened against a basket of currencies after dismal euro zone data
  Published On Thu, Sep 4 2008, 05:56 GMT
• The US dollar ignored yesterday's surprisingly strong second quarter U.S. growth data
  Published On Mon, Sep 1 2008, 05:55 GMT
• The euro held gains, benefited from a surge in oil prices
  Published On Fri, Aug 29 2008, 05:54 GMT
• The US dollar softened as investors took profit on the greenback's recent rise
  Published On Thu, Aug 28 2008, 05:55 GMT

[ View All ]

• More Reports from this Contributor

Union Bank of California http://www.uboc.com | info@uboc.com