Dollar Rebounds Off NFP Data While Political Controversy Hurts Sterling
Dollar Rebounds Off NFP Data While Political Controversy Hurts Sterling
The USD saw a brief downturn against a basket of currencies following the release of U.S. unemployment numbers for May, but began to rally shortly thereafter. . The U.S. dollar index dropped to 79.33 following the reported 345k jobs lost; much better than the 520k forecast. The labor department said the unemployment rate rose to 9.4%, the highest since July 1983. The EurUsd saw a sharp decline from $1.4266 to fall just below $1.40. The UsdJpy showed bullish movement, rising from $96.7 to over $98.2. The GbpUsd fell from $1.6241 to the $1.60 range on growing political turmoil. Equity markets were slightly flat in the US and Europe with the dow and FTSE up 52pts. Commodities were mixed with oil hovering near $69bbl, while gold fell swiftly to $962oz.
n London, heighted political tension sent the pound toward its biggest decline against the USD since April as government officials James Purnell and John Hutton resigned late yesterday and this morning, pressuring Prime Minister Gordon Brown to step down. Political uncertainty under the Brown administration has put downward pressure on the GBP. PPI was lower than expected at 0.4% vs. 0.8% easing inflation fears a bit. The euro rose against the USD on yesterday’s news from Trichet that interest rates will remain unchanged and that the worst of the economy’s decline may be nearing over the nexst few months. The Aussie and Kiwi strengthened as commodity prices rose, with oil advancing to a seven month high above $70bbl but pulled back to $69bbl as markets calmed following payroll figures. The Cad closed just shy of C$1.10 yesterday and is expected to reach parity with the USD in one year, however the Cad fell today after a government report showed employers eliminated more jobs in May than forecast.
AC Markets
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