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Currencies Update: Dollar depreciates further on jobs data
Written by article default Friday, 08 October 2010 09:45
The single and world leading currency fell against the yen to trade at levels not seen since 1995 after the infamous jobs report from the US showed that employers slashed more jobs than expected during the month of September.The US nonfarm payroll showed a 95 thousand job loss last month, compared with analysts’ median estimate of -5.0 thousand.
The dollar extended its losses against the Japanese currency to trade below 82.0 levels for the first time in 15 years, while heading for its fourth weekly drop against the European shared currency on speculations that the Fed will inject further money into the financial cycle to help boost recovery and strengthen growth in the world’s leading economy.
The dollar index, a six-currency performance gauge for the dollar, traded unchanged after setting a high of 77.75 and a low of 77.13, where currently the index is trading at 77.27.
But the dollar’s performance against the yen might spur another intervention by the government of Japan where the USDJPY pair opened today’s trading at 82.38 to set a high at 82.56 and a low at 81.70 before trimming its losses and trade at 81.80.
The pair is expected to drop further, unless the government intervenes to depreciate the Yen, where the pair managed to breach a strong support at 81.90 to target levels at 81.40, but in order to ensure achieving those targets, the pair must obtain a four-hour closing below the 81.90.
Canadian Finance Minister Jim Flaherty stated that “there are concerns about interventions in currency markets” while adding his beliefs of “Certainty” that the recent decline in the value of the dollar will be the major topic at the G-7 meeting that will be held in Canada this week, among other important issues on how to stimulate the economy and boost growth on a global scale.
The euro-dollar pair traded slightly higher at 1.3946, compared with the opening levels of 1.3924. Expectations for a bullish trend remain valid, targeting 1.4000 and 1.4035 as long as stability prevails above 1.3980.
The pound ascended in today’s trading session against the dollar, opening at 1.5874 while setting a high at 1.5954 and a low of 1.5821 while currently trading at 1.5948.
But further depreciation against the euro was noted on economic growth outlook, where the Institute of Economic and Social Research stated that the British economy’s growth rate might have declined during the third quarter of this year by half of the expansion witnessed in the second quarter of this year of 1.2 percent.
Today’s reports from the British economy showed that inflation threats still fail to uproar prices of raw materials used in factories, where the PPI Output index showed bigger than expected rise on the yearly basis, reaching 4.9 percent and 0.3 percent on the monthly scale.
By 11:33 London time, the cable appreciated 0.2 percent against the euro to trade at 87.56 pence per euro after dropping to 88.06 pence per euro.