Forex News – Dollar falls after worse-than-forecast nonfarm payrolls
April 5, 2013 2:08 pm
The dollar weakened sharply against most major counterparts after a huge disappointment in US jobs data. The much anticipated nonfarm payrolls report showed that only 88,000 jobs were created last month, the smallest in nine months, much lower than forecasts of 200,000 jobs.
Meanwhile, February’s numbers was revised up to a 268,000 gain, that was higher than the first estimated figure of 236,000.
The official unemployment rate, derived from a separate survey of households, was forecast to hold at 7.7 percent, but dropped to 7.6 percent. The reason for the decline was that the labour force participation rate fell to 63.3 percent, the lowest since May 1979.
The pound jumped to a six-week high against the dollar after the jobs data, hitting a high of $1.5325 from $1.5239.
The euro rose above the key $1.3000 level to briefly hit a high of $1.3028, the highest level since March 25, rising from pre-data levels of $ 1.2951.
USDJPY initial knee-jerk reaction was to plunge to 95.75 yen after the data from 96.27 just before the data. The pair subsequently recovered and moved back up to previous levels around 96.20 yen within a half hour of the data that was released at 8:30 am New York time.
Gold prices shot up $20 to $1573.66 due to the weaker dollar. The two assets usually have an inverse price relationship.
The weaker jobs data might reduce the likelihood that the Federal Reserve could slow its asset purchases under quantitative easing later this year.
Meanwhile against the Canadian dollar, the greenback surged due to the fact that Canadian jobs data were unexpectedly worse. The Canadian economy lost 54,500 jobs in March, while the unemployment rate rose 0.2 percentage points to 7.2 percent.
The dollar weakened sharply against most major counterparts after a huge disappointment in US jobs data. The much anticipated nonfarm payrolls report showed that only 88,000 jobs were created last month, the smallest in nine months, much lower than forecasts of 200,000 jobs.
Meanwhile, February’s numbers was revised up to a 268,000 gain, that was higher than the first estimated figure of 236,000.
The official unemployment rate, derived from a separate survey of households, was forecast to hold at 7.7 percent, but dropped to 7.6 percent. The reason for the decline was that the labour force participation rate fell to 63.3 percent, the lowest since May 1979.
The pound jumped to a six-week high against the dollar after the jobs data, hitting a high of $1.5325 from $1.5239.
The euro rose above the key $1.3000 level to briefly hit a high of $1.3028, the highest level since March 25, rising from pre-data levels of $ 1.2951.
USDJPY initial knee-jerk reaction was to plunge to 95.75 yen after the data from 96.27 just before the data. The pair subsequently recovered and moved back up to previous levels around 96.20 yen within a half hour of the data that was released at 8:30 am New York time.
Gold prices shot up $20 to $1573.66 due to the weaker dollar. The two assets usually have an inverse price relationship.
The weaker jobs data might reduce the likelihood that the Federal Reserve could slow its asset purchases under quantitative easing later this year.
Meanwhile against the Canadian dollar, the greenback surged due to the fact that Canadian jobs data were unexpectedly worse.
The Canadian economy lost 54,500 jobs in March, while the unemployment rate rose 0.2 percentage points to 7.2 percent.
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