Members login
The U.S. dollar extended gains versus most major rivals other than the Japanese yen Friday.
Written by article default Friday, 04 June 2010 09:40
Market OverviewThe U.S. dollar extended gains versus most major rivals other than the Japanese yen Friday, boosted as May nonfarm payrolls data showed a weaker-than-expected rise dominated by temporary government hiring.
The 431,000 increase in nonfarm payrolls reported by the Labor Department fell far short of the 538,000 consensus forecast produced by a survey of economists.
EURUSD remains down sharply, at USD.2052 from USD1.2156 late Thu but is stabilizing after recent drop on disappointing US jobs data. EURUSD had dropped as low as 1.2018, its lowest level since March 2006. Pair had already been under heavy pressure when US jobs numbers were released after fresh concerns over euro-zone sovereign debt crisis spreading to Hungary led investors strongly out of common currency, also sending EURCHF to all-time low.
The move saw U.S. stock index futures sharply extend earlier losses and further weighed on European stocks. The dollar and Japanese yen tend to rise when risk appetite takes a hit, benefiting from the resulting safe-haven flows.
The British pound bought USD1.4581, down from USD1.4611 Thursday.
Market expectation
Investors have turned to the safe-haven franc as the sovereign debt crisis has roiled the euro zone, and as Swiss data have steadily marched forward.
Finance ministers and central bankers of the Group of 20 industrial and developing powers are meeting in the South Korean city of Busan, where the European debt crisis and financial reform are in the spotlight.
EURUSD fell to USD1.2019, the lowest price since March 29 of 2006 but has been able to hold above USD1.2000 despite increasing risk aversion. According to analysts smaller time frames show the pair oversold at the moment. They point out those support levels below USD1.2000 lie at USD1.1960 and USD1.1910/20.