USD – Safe Haven Trading Erupts

A wave of safe haven trading hit the broad markets on Friday and within its torrent the USD gained swiftly against the EUR and GBP. Wall Street found itself sharply lower too. Cautious trading turned into a full fledged flight to quality as a combination of storms collided. The Sovereign Debt concerns in Europe took on another color with Hungary; and the Non Farm Employment Change report from the U.S. clearly disappointed investors. The Greenback’s fury against the EUR was rapid and the strength of the USD against the Single Currency has been relentless. The Non Farm Employment Change data on Friday additionally sent a fright into what was already a tentative market as a figure of 431k plus jobs was reported. The problem with this outcome was that the forecast was a gain of 521k and when the statistics were examined closely it was more than evident that the majority of the jobs were from the government sector including census work. Unfortunately the private sector continues to lag behind in job creation and investors abruptly sent a resounding message of discontent to Wall Street.

Today will be relatively quiet for data from the States, but there should be little doubt that various government officials will try to put their various spins on what is taking place on Wall Street. President Obama issued a statement that flew in the face of conventional wisdom on Friday when he said that the jobless report showed that the recovery was strong. The problem that has many investors and analysts worried is that without good job creation from the private sector in the U.S. that consumer spending will remain weak. Also one element in the Unemployment Rate, which actually showed an improvement, was the fact that it improved because many of the unemployed have simply stopped looking for work and are no longer filing claims. The USD has had a remarkable trend against both the EUR and GBP since December and the developing saga from Europe combined with poor data from the States could remain a volatile mix.

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