Dollar Weakens As U.S. Jobless Rate Ticks Higher
July 06 2018 - 5:36AM
RTTF2
The U.S. dollar drifted lower against its major counterparts in
the European session on Friday, after the release of mixed U.S.
jobs data, which showed that the economy created more jobs than
forecast in June, but the jobless edged up.
Data from the Labor Department showed that the U.S. employment
grew more than expected in June.
The report said non-farm payroll employment jumped by 213,000
jobs in June after surging up by an upwardly revised 244,000 jobs
in May.
Economists had expected employment to climb by 195,000 jobs
compared to the addition of 223,000 jobs originally reported for
the previous month.
Despite the stronger than expected job growth, the unemployment
rate rose to 4.0 percent in June from 3.8 percent in May. The
unemployment rate was expected to be unchanged.
Investors monitored trade tensions between the U.S. and China,
as American tariffs on 34 billion dollars worth of Chinese imports
took effect and China vowed to make a necessary counterattack in
equal measure.
The currency traded mixed against its major rivals in the Asian
session. While it fell against the pound and the euro, it held
steady against the franc. Against the yen, it rose.
The greenback dropped to a 2-week low of 0.7444 against the
aussie and a 9-day low of 0.6842 against the kiwi, reversing from
its early highs of 0.7376 and 0.6782, respectively. If the
greenback continues its fall, 0.76 and 0.70 are possibly seen as
its next support levels against the aussie and the kiwi,
respectively.
The greenback slipped to 110.43 against the yen, from a 3-day
high of 110.79 hit at 1:30 am ET. Next key support for the
greenback is likely seen around the 109.00 level.
Preliminary figures from the Cabinet Office showed that Japan's
leading index increased more than expected in May to the highest
level in six months.
The leading index, which measures the future economic activity,
climbed to 106.9 in May from 106.2 in April. The index was forecast
to rise to 106.6.
Reversing from an early session's high of 1.3204 against the
pound, the greenback weakened to 1.3269. The greenback is seen
challenging support around the 1.34 mark.
Data from the Lloyds bank subsidiary Halifax and IHS Markit
showed that UK house prices increased at a slower pace in June.
House prices grew only 0.3 percent on month in June, following
May's 1.7 percent increase. Prices were expected to gain 0.2
percent.
The greenback fell to a 9-day low of 0.9892 against the franc,
off early session's high of 0.9944. On the downside, 0.97 is
possibly seen as the next support level for the greenback.
The U.S. currency declined to a new 3-week low of 1.1763 against
the euro, after having advanced to 1.1680 at 10:00 pm ET. The
greenback is poised to test support around the 1.19 level.
Data from Destatis showed that Germany's industrial production
recovered at a faster than expected pace in May.
Industrial output grew 2.6 percent month-on-month in May,
reversing a revised 1.3 percent drop in April. Output was forecast
to grow marginally by 0.3 percent.
The greenback that fell to a new 3-week low of 1.3086 against
the loonie following the data, trimmed its losses immediately. At
Thursday's close, the pair was worth 1.3131.
Looking ahead, Canada Ivey PMI for June is due shortly.
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