Daily review -Dollar falls broadly on weak employment data

The US dollar is slightly changed from its yesterday’s drop against major currency counterparts, following disappointing labour market data. The greenback fell against the euro to an intraday low of $1.3116 on Wednesday, decreasing even further this morning to $1.3123, before hovering around its yesterday’s low at the time of writing.

The data released by the ADP (Automatic Data Processing) agency in the US showed that employment has increased by 135,000 jobs, missing experts’ expectations for a rise by 170,000. The result has raised further doubts about a possible reduction of the Fed’s asset-purchasing programme, given the fact that one of the key factors – employment – has just dropped. Additional pressure on the dollar came from the Factory Orders data for April, which turned out to be worse-than-expected at 1%, with estimates for an increase by 1.5%.

The greenback extended its losses against the British pound this morning, trading at 1.5438 at the time of writing.

The USD/JPY trading was highly volatile during yesterday’s session, following Japanese Prime Minister Shinzo Abe’s failure to announce new measures for reviving economic growth.

The USD/JPY is trading at 99.17 at the time of writing, being slightly higher that its yesterday low of 99.02.

Meanwhile, the Australian dollar declined sharply against its US counterpart yesterday, registering an intraday low of 95.08. The reason was Australia’s unexpectedly low GDP data, both on annual and quarterly basis – 2.5% and 0.6%, respectively. The Reserve Bank of Australia President Glenn Stevens said that economic growth remains below trend and it mostly likely will continue so in the near future.

Today, market makers will turn their focus on the European Central Bank meeting and its decision on the Eurozone’s key interest rate, along with the US Initial Jobless Claims

Source: dfmarkets.co.uk


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