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Market Review - 07/01/2009 18:46 GMT
U.S. dollar falls broadly on steep job losses in the private sector
The greenback fell broadly against major currencies on Wednesday as steep job losses in the U.S. private sector reinforced investor expectations for a prolonged recession. The single currency rallied to a 3-week high of 1.3747 versus the dollar and the greenback weakened against the Japanese yen to 92.33.
ADP employment for December showed a decrease of 693,000 jobs versus the forecast of a reduction of 495,000. The data added to speculation that the U.S. non-farm payrolls to be released on Friday will show 500,000 jobs were cut in December.
Eurozone producer prices index fell sharply by 1.9% in November in part due to a sharp drop in energy costs. The European Central Bank is expected to lower its interest rates by at least 25 basis points next week from current 2.50% with region now in a recession. The single currency tumbled against the sterling from 0.9175 to 0.8960.
The Bank of England is forecast to lower its benchmark rate by 50 basis points on Thursday to an all-time low at 1.50% as the British economy has entered its first recession in 17 years, however, the British pound rallied from 1.4803 to 1.5285 on active cross unwinding in sterling.
U.S. Treasury Secretary Henry Paulson said the Obama administration should consider converting mortgage finance giants Fannie Mae and Freddie Mac into 'public utility-like' mortgage guarantors. Paulson said policy makers must decide the appropriate level of U.S. government housing subsides for the long term.
Thursday will see the release of Australian trade balance, German trade balance, eurozone business climate, GDP and unemployment rate, German industrial production and factory orders and U.S. jobless claims.
U.S. dollar falls broadly on steep job losses in the private sector
The greenback fell broadly against major currencies on Wednesday as steep job losses in the U.S. private sector reinforced investor expectations for a prolonged recession. The single currency rallied to a 3-week high of 1.3747 versus the dollar and the greenback weakened against the Japanese yen to 92.33.
ADP employment for December showed a decrease of 693,000 jobs versus the forecast of a reduction of 495,000. The data added to speculation that the U.S. non-farm payrolls to be released on Friday will show 500,000 jobs were cut in December.
Eurozone producer prices index fell sharply by 1.9% in November in part due to a sharp drop in energy costs. The European Central Bank is expected to lower its interest rates by at least 25 basis points next week from current 2.50% with region now in a recession. The single currency tumbled against the sterling from 0.9175 to 0.8960.
The Bank of England is forecast to lower its benchmark rate by 50 basis points on Thursday to an all-time low at 1.50% as the British economy has entered its first recession in 17 years, however, the British pound rallied from 1.4803 to 1.5285 on active cross unwinding in sterling.
U.S. Treasury Secretary Henry Paulson said the Obama administration should consider converting mortgage finance giants Fannie Mae and Freddie Mac into 'public utility-like' mortgage guarantors. Paulson said policy makers must decide the appropriate level of U.S. government housing subsides for the long term.
Thursday will see the release of Australian trade balance, German trade balance, eurozone business climate, GDP and unemployment rate, German industrial production and factory orders and U.S. jobless claims.
