Related News

WORLD FOREX: Dollar Torn Apart By Higher Stocks, US Jobs Data

 
   By Dan Molinski 
   Of DOW JONES NEWSWIRES 
 

NEW YORK (Dow Jones)--The dollar fell hard Friday, hitting a six-week low versus the euro, as higher stock markets, a better-than-expected U.S. jobs report, and broad optimism in financial markets led investors to stop hoarding so much of the U.S. currency.

The euro climbed as high as $1.3629 Friday afternoon, a level unseen since late March, and the dollar fell sharply against the Swiss franc, the Canadian dollar and several other currencies as dollar-selling took off. The U.K. pound reached a four-month high against the dollar of $1.5232.

The U.S. currency's woes began with the release of the monthly nonfarm payrolls report for April, which showed that 539,000 jobs were lost last month, well below expectations for a 610,000 decline. The tamer-than-expected decline then helped U.S. stocks gain, with the Dow Jones Industrial Average gaining almost 165 points, or 1.96%.

All of this suggested to currency investors that the U.S. economy may, indeed, be starting to recover, which pushed many of them out of safe-haven bets on the dollar and into investments involving foreign currencies that potentially offer meatier returns.

Friday afternoon in New York, the euro was at $1.3627 from $1.3383 from late Thursday, while the dollar was at Y98.52 from Y99.04. The euro was at Y134.19 from Y132.58. The U.K. pound was at $1.5225 from $1.5020 late Thursday, while the dollar was at CHF1.1067 from CHF1.1307.

Some analysts say the dollar's sharp losses to end the week may lead to a bounce next week as investors take profits. On the other hand, technical analysts at Citigroup warn that Friday's move could be the beginning of a much bigger move up by the euro against the dollar, especially if the single currency can zoom through certain levels.

"We are finally about to see the impulsive trending move we have believed in," the Citigroup analysts said. "We look for a quick test of the $1.3740 level [for the euro] and an acceleration towards $1.4720 on a break above here."

Less widely traded currencies also joined in to take shots at the dollar.

The Brazilian real hit a fresh seven-month peak against the U.S. dollar Friday, despite Brazilian central bank purchases of dollars at an auction, as foreign investors poured money into local stocks and fixed-income accounts. The dollar closed at BRL2.078, down from Thursday's close of BRL2.108.

Analysts noted that Friday was the first time Brazil's central bank bought dollars in a foreign-exchange auction since September, and took it as somewhat of a sea change in currency markets as dollar-supportive risk aversion ebbs and risk appetite flows.

Canada's dollar closed the week much stronger against the U.S. dollar as its jobs report blew away expectations. The Canadian economy unexpectedly created new jobs for the first time since October, helping send the U.S. dollar to as low as C$1.1502, its lowest against the Canadian currency since November.

-By Dan Molinski, Dow Jones Newswires; 201-938-2245; dan.molinski@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=jxDoSq1%2FT99kZQdq18pKBw%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

May 08, 2009 16:30 ET (20:30 GMT)


Copyright 2009 Dow Jones & Company, Inc.

The Dow Jones content is the property of Dow Jones or its licensors, and is protected by copyright and other intellectual property laws. If you are an individual, you agree not to store, copy, reproduce, modify, distribute, transmit, display, perform, publish, transfer, create derivative works from, broadcast or circulate any Dow Jones content to anyone, including but not limited to others in the same company or organization, without the express prior written consent of Dow Jones. If you are an entity, you agree not to permit access to the Dow Jones content by anyone other than an employee of you.

Notwithstanding the foregoing, the Dow Jones content may be copied and sent without charge in the ordinary course of business provided all copyright and other proprietary rights notices, the original source attribution, and the phrase "Used with permission from Dow Jones & Company” are included. Dow Jones content may only be used in this way for a non-commercial purpose, meaning such copying:
(i) is made on either an infrequent or irregular basis to a limited number of individuals;
(ii) is incidental to the purpose of your principal business;
(iii) cannot be used as a substitute for any Dow Jones content or any substantial part of it;
(iv) has no independent commercial value;
(v) is not separately charged for; and
(vi) is not made in connection with commercial information broking, information vending, publishing or credit rating, nor for substantial reproduction through the press or media, nor for transmission via any private or public network, cable or satellite system.

You may not post any Dow Jones content to forums, newsgroups, mail lists, electronic bulletin boards, or other services, without the prior written consent of Dow Jones. To request consent for this and other matters, you may contact Dow Jones at djnewswires@dowjones.com .

The Dow Jones content is not intended for trading purposes. The Dow Jones content is not appropriate for the purposes of making a decision to carry out a transaction or trade. Nor does it provide any form of advice (investment, tax, legal) amounting to investment advice, or make any recommendations regarding particular financial instruments, investments or products. Dow Jones may discontinue or change the Dow Jones content at any time, without notice.

The Dow Jones content includes facts, views, opinions and recommendations of individuals and organizations deemed of interest. Dow Jones does not guarantee or warrant the accuracy, completeness or timeliness of, or otherwise endorse, these views, opinions and recommendations.

DOW JONES IS NOT RESPONSIBLE FOR ANY DELAY IN YOUR RECEIPT OF THE DOW JONES CONTENT RESULTING FROM THE INHERENT LIMITATIONS OF INTERNET TRANSMISSION VIA THE WORLD WIDE WEB. DUE TO THE NUMBER OF SOURCES FROM WHICH THE DOW JONES CONTENT IS OBTAINED, AND THE INHERENT HAZARDS OF ELECTRONIC DISTRIBUTION, THERE MAY BE DELAYS, OMISSIONS OR INACCURACIES IN THE DOW JONES CONTENT. THE DOW JONES CONTENT IS PROVIDED “AS IS”, WITHOUT ANY WARRANTIES. DOW JONES AND ITS AFFILIATES, AGENTS AND LICENSORS CANNOT AND DO NOT WARRANT THE ACCURACY, COMPLETENESS, CURRENTNESS, TIMELINESS, NONINFRINGEMENT, TITLE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE DOW JONES CONTENT, AND DOW JONES HEREBY DISCLAIMS ANY SUCH EXPRESS OR IMPLIED WARRANTIES. NEITHER DOW JONES NOR ANY OF ITS AFFILIATES, AGENTS OR LICENSORS SHALL BE LIABLE TO YOU OR ANYONE ELSE FOR ANY LOSS OR INJURY, OTHER THAN DEATH OR PERSONAL INJURY RESULTING DIRECTLY FROM USE OF THE DOW JONES CONTENT, CAUSED IN WHOLE OR PART BY ITS NEGLIGENCE OR CONTINGENCIES BEYOND ITS CONTROL IN PROCURING, COMPILING, INTERPRETING, REPORTING OR DELIVERING THE DOW JONES CONTENT. IN NO EVENT WILL DOW JONES, ITS AFFILIATES, AGENTS OR LICENSORS BE LIABLE TO YOU OR ANYONE ELSE FOR ANY DECISION MADE OR ACTION TAKEN BY YOU IN RELIANCE ON SUCH DOW JONES CONTENT. DOW JONES AND ITS AFFILIATES, AGENTS AND LICENSORS SHALL NOT BE LIABLE TO YOU OR ANYONE ELSE FOR ANY DAMAGES (INCLUDING, WITHOUT LIMITATION, CONSEQUENTIAL, SPECIAL, INCIDENTAL, INDIRECT, OR SIMILAR DAMAGES), OTHER THAN DIRECT DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL THE LIABILITY OF DOW JONES, ITS AFFILIATES, AGENTS AND LICENSORS ARISING OUT OF ANY CLAIM RELATED TO THIS AGREEMENT EXCEED THE AGGREGATE AMOUNT PAID BY YOU FOR THE DOW JONES CONTENT IN THE 12 MONTHS IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO SUCH CLAIM. BECAUSE SOME STATES OR JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR DAMAGES OR THE EXCLUSION OF CERTAIN TYPES OF WARRANTIES, PARTS OR ALL OF THE ABOVE LIMITATION MAY NOT APPLY TO YOU.

These Terms of Use, your rights and obligations, and all actions contemplated by these Terms of Use will be governed by the laws of England and Wales, and You and Dow Jones agree to submit to the exclusive jurisdiction of the English Courts.
If any provision in these Terms of Use is invalid or unenforceable under applicable law, the remaining provisions will continue in full force and effect, and the invalid or unenforceable provision will be deemed superseded by a valid, enforceable provision that most closely matches the intent of the original provision.