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Market Review - 02/10/2009 22:13 All times in GMT
Dollar declines versus euro as weak jobs report increases bet on low U.S. interest rates view
The greenback fell against most of its counterparts on Friday as the weaker-than-expected U.S. jobs data reinforced expectation that the Fed will keep the interest rates near zero for some time. U.S. employers cut 263,000 jobs in September compared to the economists forecast of 180,000, while the unemployment rate increased to 9.8% in September as widely expected from previous month's 9.7%. The data also raised concerns over the continuous job losses in U.S. which could eventually impede the economic recovery from the recession.
During Asian and European sessions, euro traded sideways against the dollar as traders were sidelined ahead of the release of the key U.S. jobs data. The single currency fell briefly to an intra-day low of 1.4480 after the worse-than-expected non-farm payrolls data. However, euro then rallied to as high as 1.4650 before retreating in New York afternoon after the European Union's Economic and Monetary Affairs Commissioner Joaquin Alumnia said that the single currency's recent gains would be raised at the G7 meeting. Group of Seven finance ministers and central bankers will meet in Istanbul on Saturday. G7 source said that G7's usual language on currencies in communique will not be shifted at this meeting.
The British pound traded relatively narrowly against the dollar in London morning session. Sterling then dropped briefly but sharply to as low as 1.5805 against the dollar after the release of U.S. jobs report. However, cable rebounded strongly from there to 1.5955 in late New York session. Cross buying in the pound also helped to lift the pair as eur/gbp retreated from 0.9198 to 0.9143 and gbp/jpy rallied from 140.87 to 143.26. Despite Friday's recovery, traders cited many people remained bearish on the pound ahead of the BoE monetary policy meeting next Thursday.
Data to be released in the coming week include German, eurozone, and U.K service PMI, eurozone retail sales, U.S. ISM non-manufacturing index on Monday, Australia RBA rate decision, trade balance, Switzerland CPI, U.K. industrial and manufacturing production, Canada building permits, Ivey PMI on Tuesday, U.K. Nationwide consumer confidence index, Japan leading indicators, Switzerland jobless rate, eurozone GDP, German factory orders on Wednesday, Japan current account, economic watcher survey, machine tool orders, Australia unemployment rate, German industrial production, U.K. BoE rate decision, ECB rate decision, U.S. jobless claims, wholesales inventories, Canada housing starts on Thursday, Japan machine orders, German trade balance, CPI, U.K. trade balance, PPI Canada unemployment rate, U.S. and Canada trade balance on Friday.
Dollar declines versus euro as weak jobs report increases bet on low U.S. interest rates view
The greenback fell against most of its counterparts on Friday as the weaker-than-expected U.S. jobs data reinforced expectation that the Fed will keep the interest rates near zero for some time. U.S. employers cut 263,000 jobs in September compared to the economists forecast of 180,000, while the unemployment rate increased to 9.8% in September as widely expected from previous month's 9.7%. The data also raised concerns over the continuous job losses in U.S. which could eventually impede the economic recovery from the recession.
During Asian and European sessions, euro traded sideways against the dollar as traders were sidelined ahead of the release of the key U.S. jobs data. The single currency fell briefly to an intra-day low of 1.4480 after the worse-than-expected non-farm payrolls data. However, euro then rallied to as high as 1.4650 before retreating in New York afternoon after the European Union's Economic and Monetary Affairs Commissioner Joaquin Alumnia said that the single currency's recent gains would be raised at the G7 meeting. Group of Seven finance ministers and central bankers will meet in Istanbul on Saturday. G7 source said that G7's usual language on currencies in communique will not be shifted at this meeting.
The British pound traded relatively narrowly against the dollar in London morning session. Sterling then dropped briefly but sharply to as low as 1.5805 against the dollar after the release of U.S. jobs report. However, cable rebounded strongly from there to 1.5955 in late New York session. Cross buying in the pound also helped to lift the pair as eur/gbp retreated from 0.9198 to 0.9143 and gbp/jpy rallied from 140.87 to 143.26. Despite Friday's recovery, traders cited many people remained bearish on the pound ahead of the BoE monetary policy meeting next Thursday.
Data to be released in the coming week include German, eurozone, and U.K service PMI, eurozone retail sales, U.S. ISM non-manufacturing index on Monday, Australia RBA rate decision, trade balance, Switzerland CPI, U.K. industrial and manufacturing production, Canada building permits, Ivey PMI on Tuesday, U.K. Nationwide consumer confidence index, Japan leading indicators, Switzerland jobless rate, eurozone GDP, German factory orders on Wednesday, Japan current account, economic watcher survey, machine tool orders, Australia unemployment rate, German industrial production, U.K. BoE rate decision, ECB rate decision, U.S. jobless claims, wholesales inventories, Canada housing starts on Thursday, Japan machine orders, German trade balance, CPI, U.K. trade balance, PPI Canada unemployment rate, U.S. and Canada trade balance on Friday.
