Dollar Rising Heading Into The Weekend After Weak Jobs Report
14:13, 4th May 2012
(RTTNews) - The dollar has climbed versus its European rivals Friday afternoon despite the weaker than anticipated April employment report. The currency initially weakened after the report was released, but sharply reversed direction around 10:00 AM ET. Stock markets in Europe and the U.S. were significantly weaker on Friday and the price of oil declined sharply on global economic concerns. Also weighing on investors were weak economic data from Europe and the upcoming elections in France and Greece that are to be held this weekend.
The April jobs report stirred up speculation amongst some that the Federal Reserve may now need to follow through with a third round of quantitative easing. There is also a camp who believes that the April result was not weak enough to warrant QE3.
According to figures released by the Labor Department on Friday, the overall economy added 115,000 jobs in April. Revised data showed that March job creation came in at 154,000, notably higher than the 120,000 initially reported.
The job creation numbers for April were well below the predictions of most economists, who had forecast 165,000 new jobs for the month. Despite the weaker than expected job growth in April, the unemployment rate ticked down to 8.1 percent in April from the 8.2 percent reported for March.
The buck broke out of a 2-day trading range around $1.3150 on Friday and set a 2-week high of $1.3079 versus the Euro.
Eurozone private sector activity declined in April at the fastest rate since October 2011, final data released by Markit showed Friday. The composite output index dropped to 46.7 in April from 49.1 in March. The headline index also came in well below its earlier flash estimate of 47.4.
Eurozone retail sales recovered unexpectedly in March, but the underlying trend in spending remains soft as austerity measures dampen consumer confidence. Retail sales volume climbed 0.3 percent month-on-month in March, offsetting February's 0.2 percent drop, Eurostat said Friday. Economists had expected sales to remain flat in March.
The dollar has continued to recover from the 8-month low of $1.6279 versus the pound sterling, which it reached on April 26th. On Friday, the U.S. currency reached over a one-week high of $1.6140.
The greenback has fallen below a 3-day range around Y80.25 versus the Japanese Yen and has is now testing some support around Y79.80.
Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved
Back to Forex News