Market Review – 09/07/2011 01:24 GMT
Dollar tanks against the Japanese yen on disappointing U.S. jobs data
The dollar tumbled versus the Japanese yen and the Swiss franc after the release of much worse-than-expected key U.S. jobs report, fueling speculation that the Federal Reserve will not raise interest rate anytime soon.
U.S. June non-farm payroll data came in 18K versus street forecast of 90K and the private payroll also added much lower-than-expected of 57K jobs compared to economists’ estimate of 110K. U.S. unemployment rate rose to 9.2% in June from 9.1% in May.
Versus the Japanese yen, although the dollar extended recent upmove marginally above Thursday’s high of 81.41 to 81.49 ahead of the release of U.S. jobs data, the usd/jpy pair then nose-dived to 80.51 immediately after the jobs data before trading sideways for rest of the session. Against the Swiss franc, the greenback also tumbled from 0.8523 to as low as 0.8360.
The single currency went through a roller-coaster session on Friday, price tumbled broadly in European morning due to aggressive across selling in euro. After initial sideways trading in Asia, the single currency tumbled from 1.4363 to 1.4328 in European midday on news that shares of Italian bank Unicredit have been suspended from trading. Later, despite the initial brief but drop to session low of 1.4205 after the release of disappointing U.S. jobs report, price swiftly rallied to 1.4351 before coming back swiftly to 1.4210/13 in New York afternoon. Eur/jpy, eur/gbp, eur/chf tanked from 116.81 to 114.67, 0.9001 to 0.8865 and 1.2170 to 1.1908 respectively.
In total stark contrast to its weak undertone in previous session, the British pound rallied against the greenback and the euro on active unwinding in eur/gbp cross pair. Despite cable’s brief fall from 1.5987 to 1.5931 in European midday, the pound then rose strongly to as high as 1.6078 in New York morning before retreating on profit-taking.
In other currency, the New Zealand dollar strengthened against the greenback to as high as 0.8384, the strongest since it was freely floated in 1985. In the precious metal market, spot gold price also jumped from $1525.30/oz to 1545.20/oz.
In the other news, the IMF approved a 3.2 billion-euro payment to Greece under a joint bailout package with the European Union, the Washington based agency said in an e-mailed statement reported by Bloomberg news.
Data to be released in the weekend:
China Purchasing Price Index (Y/Y) and Consumer Price Index (Y/Y) on Saturday;
China Exports Y/Y, Imports Y/Y and Trade Balance on Sunday;
Data to be released next week include:
Japan Consumer confidence, Machine tools orders, Canada Housing starts, EU FINMINs meeting in Brussels on Monday;
U.K. BRC retail sales, RICS house prices, Japan Domestic CGPI M/M n Y/Y, Tertiary Industry Index, Japan BoJ 2-day meeting start, Australia NAB business confidence, German CPI final M/M and Y/Y, HICP final M/M and Y/Y, EU FINMINs meeting in Brussels, U.K. BoE Deputy Governor Bean Speaks, U.K. CPI M/M and Y/Y, RPI M/M and Y/Y, Trade balance, DCLG house prices Y/Y, U.S. Trade balance, FOMC meeting minutes, Canada Trade balance, Imports and Exports on Tuesday;
Australia Westpac consumer confidence, China GDP Year-to-Date (Y/Y), Industrial Production YTD (Y/Y), Industrial Production YTD (Y/Y), Retail Sales YTD (Y/Y) and Retail Sales (Y/Y), Japan Industrial production, Capacity utilisation, Japan BOJ Monthly economic report, German WPI M/M and Y/Y, Swiss Combined PPI and Y/Y, U.K. Claimant count, ILO unemployment rate, Avg. earnings EU Industrial production M/M and Y/Y, EU Quarterly report on euro area, U.S. Export price index, Import price index, Fed’s Bernanke delivers semi-annual monetary policy report to house, Fed budget on Wednesday;
New Zealand GDP Q/Q Q1 and Y/Y, Japan Tankan Manufacturing, Machinery orders Y/Y, EU ECB publishes July monthly report, HICP final M/M and Y/Y, U.S. Jobless claims, PPI M/M and Y/Y, PPI core M/M and Y/Y, Retail sales, Retail sales less auto M/M, Business inventories, Fed’s Bernanke delivers semi-annual monetary policy report to senate on Thursday
EU Trade balance, U.S. CPI M/M and Y/Y, CPI core M/M and Y/Y, Real earnings, Capacity utilisation, Industrial production M/M and University of Michigan consumer confidence survey Prel. on Friday.