 Today’s US jobs data – while not great by any stretch of the imagination – did help ease some of the more pessimistic outlooks about the US as not only did the economy have a better number of private jobs created in August, the upward revision for June and July were a welcome sign. Stocks were up as was risk appetite, meaning our commodity currencies tied to global growth like AUD, CAD, NZD jumped, as did higher yielders – the EUR and GBP. Safe haven currencies like JPY, CHF, and USD weakened. |
 The dollar traded mostly lower on Thursday ahead of important US employment data on Friday. The dollar index, down for six out of the last seven days, is approaching the important 82 support. If this support holds, a short-term USD rally may occur. Treasuries weakened. US pending home sales unexpectedly rose in July and initial jobless claims declined, easing concern about slowing US economic growth. The S&P 500 gained 9.81 to 1,090.10. |
 Currency markets mainly consolidated ahead of tomorrow’s non-farm payroll report. The ECB extended its unlimited cash to banks throughout this year, an attempt to not take away special liquidity measure when financial markets remain fragile. US data showed labor producitivy slid in the 2nd quarter – a sign companies may have to start hiring, while a measure of pending home sales surprised on the upside – a rare positive release for the US housing market. |
 The dollar and yen fell on Wednesday as risk appetite increased after stronger-than-expected economic data alleviated fear on global economic slowdown. PMI manufacturing data for China and the US were better than anticipated. Investors paid less attention on ADP’s forecast of a 10K drop in August US nonfarm private payrolls and a larger-than-expected decline in July construction spending. |
 Manufacturing releases from China and the US, and a very strong 2nd quarter GDP report from Australia helped to propel global stocks to strong gains. In NY morning trading the Dow Jones Index for instance was up 240 points. That helped “”higher yielders” like the Australian and Canadian Dollars, the Euro and the Pound gain on safe haven currencies like the US Dollar. |
 The dollar was higher against the pound on Tuesday but lower versus the yen and Swiss franc. The Federal Open Market Committee August 10 meeting minutes, released today, showed that while some Fed officials were concerned the economy was weakening, there was no plan to resume large asset buys and the Fed’s decision to reinvest the proceeds of mortgage-backed securities into Treasuries earlier this month was a signal of steady monetary policy. |
 Today’s session was market by Euro strength, which was either a correction to the swings we saw the begin the week, or some end of the month flows that boosted demand for the Euro. We saw safe haven currencies continue to gain otherwise, with the Yen and US Dollar gaining on commodity currency pairs, while the Swiss Franc hit a fresh all-time high against the Euro, and hit its highest this year. Data from the US did show consumers more upbeat in August. |
 The dollar traded lower versus the yen on Monday but higher against other major currencies on continued global recovery concerns. US consumer spending accelerated in July but income growth was less than expected, indicating the economic recovery is fragile. Optimism among Texas manufactures dropped to the lowest level since March 2009. |
 The BOJ in its emergency meeting announced an expansion of its loan program – a bit of monetary easing. However, the moves were less than expected by the market and traders bought the Yen after having sold it off late last week and to start Sunday’s trading. Currencies sensitive to risk sentiment and global growth faltered, with the US Dollar and Swiss Franc gaining. US stocks slid increasing risk aversion in the NY session. |
FX Strategy Briefing: Dollar Index Falls to Support on Better Job Data
Featured \ Hans Nilsson \ 6:37 PM EDT \ September 3rd, 2010The dollar, while rising against the yen and Swiss franc, fell versus other key counterparts after better-than-expected US employment data eased concern of a double-dip recession. For the week, all the major crosses except sterling rose against the greenback. Private-sector payrolls grew more than expected in August and job losses in July and June were revised down, while the August ISM non-manufacturing index fell to the lowest level in seven months.