Mixed dollar news ahead of payrolls
The US dollar went on a rollercoaster ride on Thursday following the release of a barrage of economic data, before settling modestly lower prior to today’s all-important non-farm payrolls reading.
The greenback fell as low as $1.3018 against the euro, a drop of virtually a cent on the day. But by mid-session New York trading it had recovered to $1.2969, cutting its losses to just 0.4 per cent.
A surprise rise in US weekly jobless claims to 350,000, some 30,000 more than expected, provided the initial upset. The jobless reading was afforded greater prominence that usual, given its proximity to today’s March payrolls number.
The dollar’s descent was further fuelled by the February reading of the personal consumption expenditures index, Federal Reserve chairman Alan Greenspan’s preferred inflation measure.
Though the core PCE index rose 1.6 per cent in the year to February, in line with forecasts, the market chose to take this as a negative.
However the later release of the Chicago purchasing managers’ index sparked a rebound that allowed the dollar to claw back much of its losses to sit 0.5 per cent lower at $1.8887 against sterling and 0.4 per cent softer at Y107.15 to the yen.
The Chicago measure rose to 69.2 in March, its highest level since 1988, from 62.7 in February. Crucially the employment component jumped to its highest level since 1983, with the production and new orders elements also strong.
Sterling endured a rollercoaster ride of its own, weakening across the board only to recover to sit a fraction higher at £0.6866 against the euro and Y202.30 versus the yen. The initial sell-off was provoked by the Nationwide house price survey, which showed a 0.6 per cent month -on -month slide in prices in March, the steepest fall since June 1995. But a surprise pick up in UK consumer confidence, allied to the woes of rival currencies allowed the pound to recover.
The euro had to contend with the third stright monthly fall in eurozone business sentiment and a fresh surge in German unemployment to 12 per cent, damping talk of a eurozone rate rise.
The yen had started boldly, only to be undone by nervousness ahead of Friday’s quarterly Tankan business sentiment data.
But at least the Canadian dollar managed to firm 0.6 per cent to C$1.2101 against its southern neighbour as employment growth and factory output surged ahead, prompting speculation of a further rate rise as soon a May, even as January GDP growth undershot expectations.
The greenback fell as low as $1.3018 against the euro, a drop of virtually a cent on the day. But by mid-session New York trading it had recovered to $1.2969, cutting its losses to just 0.4 per cent.
A surprise rise in US weekly jobless claims to 350,000, some 30,000 more than expected, provided the initial upset. The jobless reading was afforded greater prominence that usual, given its proximity to today’s March payrolls number.
The dollar’s descent was further fuelled by the February reading of the personal consumption expenditures index, Federal Reserve chairman Alan Greenspan’s preferred inflation measure.
Though the core PCE index rose 1.6 per cent in the year to February, in line with forecasts, the market chose to take this as a negative.
However the later release of the Chicago purchasing managers’ index sparked a rebound that allowed the dollar to claw back much of its losses to sit 0.5 per cent lower at $1.8887 against sterling and 0.4 per cent softer at Y107.15 to the yen.
The Chicago measure rose to 69.2 in March, its highest level since 1988, from 62.7 in February. Crucially the employment component jumped to its highest level since 1983, with the production and new orders elements also strong.
Sterling endured a rollercoaster ride of its own, weakening across the board only to recover to sit a fraction higher at £0.6866 against the euro and Y202.30 versus the yen. The initial sell-off was provoked by the Nationwide house price survey, which showed a 0.6 per cent month -on -month slide in prices in March, the steepest fall since June 1995. But a surprise pick up in UK consumer confidence, allied to the woes of rival currencies allowed the pound to recover.
The euro had to contend with the third stright monthly fall in eurozone business sentiment and a fresh surge in German unemployment to 12 per cent, damping talk of a eurozone rate rise.
The yen had started boldly, only to be undone by nervousness ahead of Friday’s quarterly Tankan business sentiment data.
But at least the Canadian dollar managed to firm 0.6 per cent to C$1.2101 against its southern neighbour as employment growth and factory output surged ahead, prompting speculation of a further rate rise as soon a May, even as January GDP growth undershot expectations.
posted by Drs Search @ 9:06 AM
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