The euro appreciated vis--vis the U.S. dollar today as the single currency tested offers around US$ 1.5770 level and was supported around the $1.5635 level. Technically, todays intraday high was right around the 23.6% retracement of the move from $1.5340 to $1.5895. The common currency spiked higher following the release of U.S. March non-farm payrolls data that saw job losses of 80,000 last month, worse than the -50,000 expected, while the unemployment rate moved higher to 5.1% fro, 4.8% in February. Todays result marks the first time since June 2003 that the economy has lost jobs in three consecutive months and todays loss of 80,000 was the largest since March 2003. Also, average hourly earnings were up 0.3% in March. Federal Governor Mishkin again reiterated that specific inflation targets help anchor long-term inflation expectations while San Francisco Fed President Yellen reported the U.S. economy could contract in the first half of this year. In eurozone news, European Central Bank President Trichet warned against second-round inflation effects and noted the ECBs major goal is to solidly anchor inflation expectations. Concerning exchange rates, Trichet added Excessive volatility is counterproductive from a standpoint of (economic) growth. I would say that the recent excessive moves are an element of concern. I appreciate enormously that the U.S. authorities, the secretary of the Treasury and my friend Ben Bernanke say that a strong dollar is in the interests of the U.S. economy. ECB member Constancio added I expect a deceleration of growth throughout the year and that will help with inflation, of course. Data released in the eurozone today saw February manufacturing orders off 0.5% m/m and up 0.9% y/y. German finance minister Steinbrueck said EMU-15 economic growth has been relatively positive. Euro bids are cited around the US$ 1.5345 level.
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