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Market Review - 06/03/2009 23:40 GMT
Dollar and yen decline on reduced need for safe-haven trades; U.S. non-farm payrolls comes in close to market expectations
The dollar and Japanese yen weakened on Friday as investors' fears that the U.S. employment report would be much worse than expected turned out to be unfounded as the non-farm payrolls figure came in close to the market consensus forecast with 651,00 jobs lost in February (economists had expected 648,000), however, the unemployment rose from 7.6% to 8.1% compared to the median forecast of a 7.9% rate.
Dollar fell across the board as traders squared long positions ahead of the release of the closely-watched U.S. non-farm payrolls data, with rumours that the figure could be as high as one million increasing nervousness among market participants. The greenback weakened to 96.57 versus the yen before rebounding to 98.29, however, usd/jpy was well off the four-month high of 99.69 made on Thursday.
Euro and sterling hit intra-day highs of 1.2755 and 1.4306 respectively before retreating in New York afternoon session on the back of a brief selloff in U.S. equities (the Dow was able to recover its losses and the index rebounded into positive territory to end the day up 32 points), with the sterling falling sharply on active cross selling to 1.4039 before recovering 1.4092. The single currency strengthened to 1.2655 and 124.39 against the dollar and yen respectively.
The value of the Japanese yen as a safe-haven investment has diminished recently due to the weak economic data out of Japan, prompting Finance Minister Kaoru Yosano to say that the government will need to revise its gross domestic product forecast. Japan will release its current account on Monday, machine orders on Wednesday, GDP on Thursday and industrial production on Friday.
Other data due out in the upcoming week include U.K. industrial and manufacturing production on Tuesday, RBNZ rate decision late on Wednesday (20:00GMT), Australian unemployment and U.S. jobless claims on Thursday, followed by U.S. trade balance and the University of Michigan preliminary sentiment survey on Friday.
Dollar and yen decline on reduced need for safe-haven trades; U.S. non-farm payrolls comes in close to market expectations
The dollar and Japanese yen weakened on Friday as investors' fears that the U.S. employment report would be much worse than expected turned out to be unfounded as the non-farm payrolls figure came in close to the market consensus forecast with 651,00 jobs lost in February (economists had expected 648,000), however, the unemployment rose from 7.6% to 8.1% compared to the median forecast of a 7.9% rate.
Dollar fell across the board as traders squared long positions ahead of the release of the closely-watched U.S. non-farm payrolls data, with rumours that the figure could be as high as one million increasing nervousness among market participants. The greenback weakened to 96.57 versus the yen before rebounding to 98.29, however, usd/jpy was well off the four-month high of 99.69 made on Thursday.
Euro and sterling hit intra-day highs of 1.2755 and 1.4306 respectively before retreating in New York afternoon session on the back of a brief selloff in U.S. equities (the Dow was able to recover its losses and the index rebounded into positive territory to end the day up 32 points), with the sterling falling sharply on active cross selling to 1.4039 before recovering 1.4092. The single currency strengthened to 1.2655 and 124.39 against the dollar and yen respectively.
The value of the Japanese yen as a safe-haven investment has diminished recently due to the weak economic data out of Japan, prompting Finance Minister Kaoru Yosano to say that the government will need to revise its gross domestic product forecast. Japan will release its current account on Monday, machine orders on Wednesday, GDP on Thursday and industrial production on Friday.
Other data due out in the upcoming week include U.K. industrial and manufacturing production on Tuesday, RBNZ rate decision late on Wednesday (20:00GMT), Australian unemployment and U.S. jobless claims on Thursday, followed by U.S. trade balance and the University of Michigan preliminary sentiment survey on Friday.
