Daily Market Outlook by AceTrader

Market Review – 04/04/2010 14:26GMT

Dollar jumps after strong U.S. employment report

Although the greenback traded narrowly in holiday-thin Easter Friday in Asia as markets in Europe were closed for Easter Friday holiday,

price later rallied across the board after release of the key U.S. non-farm payrolls data, the report showed U.S. employers added jobs at the fastest rate in nearly 3 years in March whilst the unemployment rate stood still at 9.7%. U.S. non-farm payrolls increased by 162,000 in March compared to previous month’s figure of -36,000 and despite smaller than street forecast of 190,000, traders bought dollar across the board.  
  
Versus the yen, dollar initially traded with a firm undertone in Asia following this week’s rise and price jumped after release of the U.S. jobs report, dollar swiftly climbed to a 7-month peak of 94.70 and closed near the day’s high. Yen remained weak as investors sold yen against most currencies as recent bullish U.S. economic data brought a return of risk apeptite. Despite Wednesday’s weaker-than-expected ADP employment data for private sector of -23.0k vs forecast of +20.0k, Friday’s strong payrolls gave an upbeat outlook on the U.S. economy. Investors went back to carry trades and eur/yen, gbp/yen and aud/yen rose strongly to intra-day highs of 127.95, 143.95 and 87.04 respectively.  
  
The single currency traded with a soft undertone initially in Asia after previous day’s strong rise to 1.3592, however, shortly after U.S. employment data came out, price fell sharply on dollar’s broad-based rise n subsequently weakened to 1.3475 and closed at 1.3503.  
  
Although many centres will be closed especially in Europe due to Easter Monday holiday, U.S. will be opened and apart from the release of U.S. pending home sales, U.S. ISM non-manufacturing indes, the Fed is scheduled to meet to review the Discount Lending Rate, there is a slight possibility the Board of Governors may condsider increasing the rate.

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