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Market Review - 06/02/2009 23:26 GMT
Dollar falls broadly versus European currencies on hope for U.S. stimulus plan despite weak jobs report
The greenback declined broadly against major currencies except the Japanese yen on Friday as the release of weak U.S. jobs report added to speculation that Congress will quickly pass a stimulus package to help lift the economy out of recession, reducing demand for U.S. dollar as a safe-haven currency.
U.S. employers eliminated 598,000 jobs in January, the deepest cut in monthly payrolls in 34 years, following an upwardly-revised 577,000 jobs cut in December. The unemployment rate increased to 7.6%, the highest level since 1992 and above the expectation of 7.5% and the reading of 7.2% in December.
Senate Majority Leader Harry Reid, a Nevada Democrat, said he believed the chamber would ‘be able to work something out’. The Senate is expected to finish discussions on the estimated $937 billion stimulus package aimed at boosting the battered economy. Treasury Secretary Timothy Geithner will announce a plan on February 9 to aid U.S. banks that will likely emphasize guarantees of toxic assets over proposals to create an aggregator bank that would remove them from balance sheets.
The single currency rallied against the U.S. dollar and the Japanese yen from 1.2747 to 1.2993 and from 115.70 to 119.73 respectively. The British pound rose sharply from 1.4590 to 1.4845 on active cross buying in sterling together with dollar’s broad-based weakness against other European currencies. Euro tumbled versus sterling to 0.8663 while sterling strengthened versus the Japanese unit from 132.50 to 136.76.
The greenback rebounded from 90.72 to 92.22 on cross selling in yen and fell sharply versus Swiss franc from 1.1746 to 1.1592. The Australian dollar and New Zealand dollar rallied against the U.S. currency from 0.6473 to 0.6802 and from 0.5110 to 0.5369 respectively. The Reserve Bank of Australian is expected to slow the pace of interest-rate cuts after it said earlier this week that the policies are now in place’ to support the economy.
Next week will see the release of Japan’s trade balance, current account, machine orders, economic watch and German current account on Monday; U.K. BRC retail sales, RICS house prices and trade balance, Japan’s consumer confidence, U.S. wholesale inventories on Tuesday; German CPI and HICP, U.K. claimant count, ILO unemployment rate, U.S. trade balance and Fed budget on Wednesday; Japan’s domestic CGPI, eurozone industrial production, U.S. jobless claims, retail sales and business inventories on Thursday; German and eurozone GDP and University of Michigan survey on Friday.
Dollar falls broadly versus European currencies on hope for U.S. stimulus plan despite weak jobs report
The greenback declined broadly against major currencies except the Japanese yen on Friday as the release of weak U.S. jobs report added to speculation that Congress will quickly pass a stimulus package to help lift the economy out of recession, reducing demand for U.S. dollar as a safe-haven currency.
U.S. employers eliminated 598,000 jobs in January, the deepest cut in monthly payrolls in 34 years, following an upwardly-revised 577,000 jobs cut in December. The unemployment rate increased to 7.6%, the highest level since 1992 and above the expectation of 7.5% and the reading of 7.2% in December.
Senate Majority Leader Harry Reid, a Nevada Democrat, said he believed the chamber would ‘be able to work something out’. The Senate is expected to finish discussions on the estimated $937 billion stimulus package aimed at boosting the battered economy. Treasury Secretary Timothy Geithner will announce a plan on February 9 to aid U.S. banks that will likely emphasize guarantees of toxic assets over proposals to create an aggregator bank that would remove them from balance sheets.
The single currency rallied against the U.S. dollar and the Japanese yen from 1.2747 to 1.2993 and from 115.70 to 119.73 respectively. The British pound rose sharply from 1.4590 to 1.4845 on active cross buying in sterling together with dollar’s broad-based weakness against other European currencies. Euro tumbled versus sterling to 0.8663 while sterling strengthened versus the Japanese unit from 132.50 to 136.76.
The greenback rebounded from 90.72 to 92.22 on cross selling in yen and fell sharply versus Swiss franc from 1.1746 to 1.1592. The Australian dollar and New Zealand dollar rallied against the U.S. currency from 0.6473 to 0.6802 and from 0.5110 to 0.5369 respectively. The Reserve Bank of Australian is expected to slow the pace of interest-rate cuts after it said earlier this week that the policies are now in place’ to support the economy.
Next week will see the release of Japan’s trade balance, current account, machine orders, economic watch and German current account on Monday; U.K. BRC retail sales, RICS house prices and trade balance, Japan’s consumer confidence, U.S. wholesale inventories on Tuesday; German CPI and HICP, U.K. claimant count, ILO unemployment rate, U.S. trade balance and Fed budget on Wednesday; Japan’s domestic CGPI, eurozone industrial production, U.S. jobless claims, retail sales and business inventories on Thursday; German and eurozone GDP and University of Michigan survey on Friday.
