The U.S. dollar fell versus the single currency on Friday after a report showed U.S. payrolls shed jobs for the first time this year, suggesting the nation's recovery remained fragile.
The key June U.S. payrolls fell by 125k as U.S. government shed 225k temporary workers employed for the 2010 census, this means employment dropped for the 1st time in 2010 and a lower-than-expected increase in private hiring (only 83K jobs were created) added concerns that the pace of the economic recovery could slow down in the second half, however, unemployment rate fell to 9.5% from 9.7% in the previous month.
Despite Thursday's selloff to 7-month low of 86.96 on worries of slowing global recovery, the greenback rebounded versus the Japanese yen to an intra-day high of 88.22 in Asia due to short-covering after rumour of BOJ was checking price in Thursday's NY session together with active buying from Japanese importers. The pair then retreated from said high as investors waited for the closely eyed US non-form payrolls data. Although the pair initially rebounded to 88.13 after the release of U.S. jobs data, price then fell briefly but sharply to 87.33 before recovery was seen ahead of the long weekend as the U.S. markets would be closed on Monday for July 4th Independence Day.
Although euro edged lower to 1.2483 in Asia after rally in the previous session, the single currency rallied above Thursday's high of 1.2541 and extended recent upmove to 1.2613 after the release of U.S. jobs data. Euro staged a pullback from there before moving narrowly in late NY trade.
The British pound pound also rose above the 1.5190 high of Thursday and extended recent upmove to 1.5230 after the release of U.S. jobs data before easing in NY afternoon.
On economic front, U.S. durable goods was revised to -0.6% in May from the previous reading of -1.1% whilst U.S. factory dropped by 1.4% versus economists' expectation of a decrease of 0.5%. U.K. construction PMI data was slightly weaker-than-expected and came in at 58.4 in June vs forecast of 58.5.
Economic data to be released next week include: Swiss Retail sales, Germany Services PMI, EU Services PMI, U.K. Services PMI, EU Retail sales on Monday (U.S. Market holiday ), Australia Trade balance, RBA rate decision, Japan Leading indicators, Swiss CPI, Canada Building permits, U.S. ISM non-manufacturing on Tuesday, EU GDP, Germany Factory orders, Canada Ivey PMI on
Wednesday,Japan Machine orders, Current account, Australia Employment change, Unemployment rate, Swiss Jobless rate, Germany Trade balance, U.K. Industrial prod'n, Manufacturing prod'n, BOE rate decision, ECB rate decision, U.S. Jobless claims on Thursday ,Germany CPI, U.K. PPI, Trade balance, Canada Unemployment rate and Housing starts on Friday.