The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4295 level and was supported around the $1.4190 level. The common currency retraced some of yesterday's losses as U.S. economic data were generally weaker-than-expected. First, it was reported that MBA mortgage applications were off 2.2% in the latest week, down from the prior reading of +7.5%. Second, August Challenger job cuts were off 13.8% y/y, down from the prior reading of -5.7%. Third, the August ADP employment report evidenced a 298,000 contraction in private sector jobs, worse than forecast but better than July's revised reading of -360,000. Fourth, July factory orders printed at +1.3%, below estimates but above the revised June print of +0.9%. Fifth, Q2 unit labour costs were off 5.9%, down from the preliminary reading of -5.8%. Sixth, it was reported that Q2 non-farm productivity grew a healthy 6.6%, up from the prior reading of 6.4%. While productivity growth is generally seen as a long-term benefit to the economy, it is also coincident with a decrease in payrolls and that means companies are accomplishing more with fewer workers. Seventh, August personal bankruptcies were up 24% y/y. Minutes from the Federal Open Market Committee's interest rate deliberations on 12 August were released today and they did not offer much guidance about the Fed's plans to maintain significant amounts of liquidity in the banking system to support the economy. In eurozone news, the German finance ministry reported the state of the economy has stabilized following a meeting of Ecofin finance ministers in Brussels. The hot button in the eurozone and U.K. now is a plan to limit bankers' bonuses. Data released in the eurozone today saw EMU-16 industrial producer prices register their sharpest annual decline in more than 27 years, off 0.8% m/m and 8.5% y/y. Also, EMU-16 Q2 GDP was off 0.1% q/q and 4.7% y/y. Euro bids are cited around the US$ 1.3900 figure.
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