The Forex Daily Digest - January 8, 2010
The USD turned higher against the EUR, boosted by some technical buying. The U.S. stock markets and oil declined while Treasuries rallied after American employers unexpectedly eliminated jobs last month, spurring concern the economic recovery will weaken. The U.S. Dollar Index, a six-currency gauge of the strength of the USD, fell 0.5 percent after a U.S. payrolls report showed 85,000 jobs were lost in December. Some investors buy gold to hedge against a decline in the U.S. currency.
James Bullard, president of the St. Louis Federal Reserve Bank, said it would be good to see more improvement in the U.S. job market before exiting some stimulus programs. He told students at a university forum in Shanghai today that the U.S. economy was improving but some policies put in place to support the recovery should not be withdrawn yet. He said, "We haven't even seen a positive jobs report in the U.S. economy. We'd like to see at least one month of positive jobs growth.”
Japanese Prime Minister Yukio Hatoyama said today that foreign exchange rates should move stably because rapid fluctuations could hurt the economy. Japan's newly appointed Finance Minister Naoto Kan said the JPY's exchange rate should be determined by markets, after his comments a day earlier were read as his preference for a weaker currency and sent the yen lower. Kan's comment followed remarks a day earlier, in which he said Japanese companies are in favor of the USD trading around 95 yen. Speaking at his first press conference since becoming finance minister, Kan reportedly said the currency-market trends have "corrected a lot toward yen weakness since the Dubai shock ... but I'm hoping the correction will make a bit more progress, making the yen weaker."
The GBP rose against the USD after the Nonfarm Payrolls report, while British producer prices jumped more than forecast, a sign that inflation is picking up. The GBP advanced against 15 of its 16 most-traded counterparts, paring a weekly decline versus the USD. The median estimate of economists before the U.S. nonfarm payrolls report had predicted no change in employment.
The CAD traded near the strongest level in more than two months against the USD after government reports showed employers unexpectedly cut jobs in both countries. Bank of Canada policy makers left the benchmark overnight lending rate at a record low 0.25 percent at their last meeting in December and reiterated a pledge to keep it there through June, barring a change in the outlook on inflation. The rate was 4.5 percent when the bank began cutting it in December 2007. The next policy meeting is scheduled for Jan. 19.
On the economic calendar next week expect the U.S. Trade Balance, the Fed’s Beige Book, Retail Sales, Import/Export Prices, Business Inventories, the Consumer Price Index, the Empire Manufacturing Survey, Capacity Utilization, Industrial Production, and the University of Michigan Sentiment report. On the earnings calendar, Alcoa starts the fourth quarter earnings season on Monday when they report their earnings after the closing bell. Also, watch for Linear Technology, Douglas Holdings, and MDS Inc.
James Bullard, president of the St. Louis Federal Reserve Bank, said it would be good to see more improvement in the U.S. job market before exiting some stimulus programs. He told students at a university forum in Shanghai today that the U.S. economy was improving but some policies put in place to support the recovery should not be withdrawn yet. He said, "We haven't even seen a positive jobs report in the U.S. economy. We'd like to see at least one month of positive jobs growth.”
Japanese Prime Minister Yukio Hatoyama said today that foreign exchange rates should move stably because rapid fluctuations could hurt the economy. Japan's newly appointed Finance Minister Naoto Kan said the JPY's exchange rate should be determined by markets, after his comments a day earlier were read as his preference for a weaker currency and sent the yen lower. Kan's comment followed remarks a day earlier, in which he said Japanese companies are in favor of the USD trading around 95 yen. Speaking at his first press conference since becoming finance minister, Kan reportedly said the currency-market trends have "corrected a lot toward yen weakness since the Dubai shock ... but I'm hoping the correction will make a bit more progress, making the yen weaker."
The GBP rose against the USD after the Nonfarm Payrolls report, while British producer prices jumped more than forecast, a sign that inflation is picking up. The GBP advanced against 15 of its 16 most-traded counterparts, paring a weekly decline versus the USD. The median estimate of economists before the U.S. nonfarm payrolls report had predicted no change in employment.
The CAD traded near the strongest level in more than two months against the USD after government reports showed employers unexpectedly cut jobs in both countries. Bank of Canada policy makers left the benchmark overnight lending rate at a record low 0.25 percent at their last meeting in December and reiterated a pledge to keep it there through June, barring a change in the outlook on inflation. The rate was 4.5 percent when the bank began cutting it in December 2007. The next policy meeting is scheduled for Jan. 19.
On the economic calendar next week expect the U.S. Trade Balance, the Fed’s Beige Book, Retail Sales, Import/Export Prices, Business Inventories, the Consumer Price Index, the Empire Manufacturing Survey, Capacity Utilization, Industrial Production, and the University of Michigan Sentiment report. On the earnings calendar, Alcoa starts the fourth quarter earnings season on Monday when they report their earnings after the closing bell. Also, watch for Linear Technology, Douglas Holdings, and MDS Inc.
Views: 7
Comment
© 2024 Created by James Dicks.
Powered by
You need to be a member of JDFN Financial Network to add comments!
Join JDFN Financial Network