The dollar and yen weakened in U.S. session against most of their major counterparts as investors turned more hopeful that the global economy will recover after release of the key U.S. jobs data and bought higher-yielding assets after the report showed U.S. payroll losses slowed. U.S. non-farm payroll data in August reported a loss of 216,000 jobs (better than forecast of –225,000) compared to a revised figure of -276,000 in the previous month, while the unemployment rate rose to its highest since 1983 at 9.7%.
Earlier, euro advanced to 1.4289 in European morning due to firm prices in regional equities, the pair then fell to as low as 1.4191 after the release of U.S. data as the greenback strengthened across the board. However, investors’ optimism on economic recovery gave boost to high-yielding currencies, the single currency rebounded strongly later on to an intra-day high of 1.4328 in U.S. afternoon.
Cable fell to as low as 1.6288 in tandem with euro du eto dollar’s broad-based firmness after the release of U.S. data, price later staged a strong rebound to 1.6412 (3 ticks below Thursday high at 1.6415) on improved risk-appetite and relatively thin trading volume ahead of the G-20 meeting and U.S. long weekend (Labour Day on Monday).
Against the yen, dollar fell briefly to 92.27 after U.S. employment report, however, the greenback then rallied across the board to as high as 93.26 as traders’ purchase in risky assets diminished the demand for safe-haven currencies. Yen declined broadly against its major counterparts, price weakened against euro, sterling and aussie to as low as 133.25, 152.73 and 79.38 respectively.
DJI rose 96 points to end at 9441 on economic recovery hopes, while S&P 500 and NASDAQ advanced 13 and 35 points respectively, closed at 1016 and 2018.
Economic data to be released next week include:
Monday - Factory orders in Germany.
Tuesday - BRC retail sales, RICS house prices, industrial production and manufacturing production in U.K.; jobless rate in Switzerland; trade balance, current account, industrial production, import and export figure in Germany; building permits in Canada.
Wednesday – Nationwide consumer confidence and Trade balance in U.K.; Westpac consumer confidence and retail sales in Australia; leading indicators and tools orders in Japan; CPI and HICP in Germany and; housing starts in Canada.
Thursday – RBNZ September rate decision; domestic CGPI and machine orders in Japan; employment change and unemployment rate in Australia; BOE rate decision; trade balance and Jobless claims in U.S.; trade balance, imports, exports and BOC rate decision in Canada.
Friday – GDP and consumer confidence in Japan; WPI in Germany; PPI in U.K.; new housing price in Canada; University of Michigan survey index, wholesales inventories and Fed budget in U.S.