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US Session: Investors Return To Fundamentals After Positive U.S. Employment Data
August 07, 2009 10:19 PM CEST
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G10 Advancers and Decliners vs USD |
| | Nzd | 0.24 |  |  | Sek | -0.12 | | | Aud | -0.38 | | | Cad | -0.44 | | | Gbp | -0.61 | | | Nok | -0.80 | | | Eur | -1.21 | | | Dkk | -1.23 | | | Chf | -1.57 | | | Jpy | -2.09 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 9,391.61 | + 1.46 | | S&P 500 Index | 1,012.57 | + 1.55 | | NASDAQ 100 Index | 2,003.45 | + 1.54 | | Nikkei 225 Futures | 10,390.00 | + 0.29 | | Hang Seng Futures | 20,310.00 | + 2.76 | | FTSE futures | 70.79 | - 1.60 | | SMI Futures | 6,030.00 | + 1.09 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 70.79 | - 1.60 | | Gold | 954.58 | - 0.90 | | Silver | 14.60 | + 0.24 | | USD Index | 78.93 | + 1.12 | | VIX | 24.62 | - 4.09 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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Currency Tech |
AUDUSD
R 2: 0.8695
R 1: 0.8520
CURRENT: 0.8438
S 1: 0.8340
S 2: 0.8239
EURJPY
R 2: 139.22
R 1: 138.30
CURRENT: 137.12
S 1: 134.29
S 2: 132.80
USDCAD
R 2: 1.1013
R 1: 1.0935
CURRENT: 1.0709
S 1: 1.0633
S 2: 1.0545
USDMXN
R 2: 13.306
R 1: 13.225
CURRENT: 13.04
S 1: 12.987
S 2: 12.85
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Market Brief |
Steady dollar positions turned bullish in the early session after the release of uplifting U.S. employment data. The EurUsd declined 189pips testing resistance at 1.42, while the UsdJpy appreciated 206pips to the mid-range of 97. The GbpUsd was lower, falling 97pips and keeping the cable just below 1.67. Equity markets rose in the U.S. and Europe, with the Dow up by 1.84% or 170.12pts to above 9400 and the FTSE higher by .93% or 43.40pts. The yield curve was slightly steeper with 10 and 30 year bonds up 10bps and 5bps respectively. Commodities were mixed with oil finding support at $72bbl and gold testing support at $955oz.
Intraday trading marked a shift in recovery dynamics as the dollar appreciated on positive U.S. employment data. Non-farm payrolls were better-than-expected at -247k versus estimates of -325k; the smallest drop since August of last year, but still the 19th consecutive drop. The U.S. unemployment rate slid .1% to 9.4% versus expectations for a .1% appreciation, marking the first decline since April of last year. Even though the Dow reacted positively to U.S. employment data and rallied over 170pts, investors sent the dollar higher against most majors and the DXY rising .86%. Also, an earnings report from U.S. taxpayer powered AIG Inc. posted $1.82bln profit for Q2, the first positive profit for the company since 2007. A higher dollar on positive economic news could be a sign that investors are returning to trade based on the currency’s fundamentals; a viable sign of a recovery in the U.S. Downbeat Canadian unemployment data revealed that jobs dropped by 44,500 in June versus a decline of 7,400k in May, and the unemployment rate was 8.6% versus 8.8% forecasted; in response the loonie fell 56pips to $C1.0822 despite a 153pt rally in the TSX. The dollar appeared attractive to investors today, appreciating as much as 2.4% against the Japanese yen, which is typically a good measure of risk aversion.
In addition, to explanations of today’s dollar strength a stormy economy in the U.K. continued to thunder as BoE Governor Meryvn King said the central bank would be able to maintain a tight monetary policy and combat high inflation, despite yesterday’s increase in bond purchases. However, Analysts remained doubtful as the BoE’s bond purchase program has become equivalent to 12% of the nation’s GDP. The cable sold off, falling 100pips intraday as investors lost faith in high yielding currencies, including the loonie.
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