Spot Foreign Exchange Trader with MG Financial Group in New York

Jobs Data Disappoints, USD Edges Up
06 Nov, 2009 @ 02:44 pm ET | By Korman Tam
***Please note there will be no US FX Trading Summary between 11/9-11/27.***
The major currency pairs teetered within a close range in the Friday session, whipsawing sharply following the release of the October US unemployment report. The euro slid from above the 1.49-level to a session low at 1.4814 while the yen jumped to 89.62 against the greenback.
The October labor report was worst than expected, with the unemployment rate climbing to a fresh 26-year high at 10.2% versus 9.8% from September. The non-farm payrolls figure revealed a loss of 190k jobs in October, worst than the forecasted loss of 175k jobs from a downwardly revised September reading of 219k jobs lost. The worst than estimated jobs data sent US equity futures lower and pushed the greenback higher on a shift from riskier assets.
Also released earlier today were wholesale inventories, wholesale sales, and consumer credit. The wholesale inventories report edged out consensus estimates for a decline of 1.0%, instead declining by 0.9% in September from a 1.3% decline a month earlier. The wholesale sales reading rose by 0.7% versus an upwardly revised 1.1%.
With the labor market yet to show signs of bottoming, the Fed will likely continue to leave monetary policy unchanged into the second half of 2010. Given the commentary from the RBA and ECB, the FOMC will lag behind the other central banks as they begin to rein in the aggressive quantitative easing implemented over the past 2-years. As such, the dollar will continue to be the risk-averse trade benefitting from any renewed fears of a stall in the global economic recovery.
EURUSD holds steady near 1.4840, with support seen at 1.48, followed by 1.4760 and 1.4730. Additional floors will emerge at 1.47, backed by 1.4660 and 1.4620. Resistance starts at 1.4870, followed by 1.49 and 1.4940. Subsequent ceilings are eyed at 1.4980, backed by 1.50 and 1.5040.
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