The greenback surged above 100 level against the Japanese yen for the fist time in five months and touched a session high of 100.38 on Friday after reports showed the U.S. economy continued to hemorrhage jobs in March. Data from U.S. showed that unemployment rate jumped in March to 25-year high of 8.5 percent with change in non-farm payrolls reported a lost of 663,00 jobs in last month. However, the reports did little to dampen investors risk appetite as it was almost to be expected. The ICE futures U.S. dollar index (which measures the dollar strengths against six other currencies) ended lower to 84.182, after rising to as high as 84.762.
In earlier New York trading, the single currency dipped to as low as 1.3365 against the dollar as soon as the release of U.S. jobs data but reversal in U.S. stock markets encourage investors to buy more risky assets and euro ended up higher to 1.3484 in late U.S. session, posting a 1.9 percent gain over the week.
The British pound rallied against the dollar and euro on Friday as data showed U.K. services industries rose to a six-month high in March (45.5 versus 43.2 in Feb), adding to evidence that the recession’s grip on the British economy is loosening. The sterling surged to as high as 1.4848 against the dollar while eur/gpp fell to a session low of 0.9040 before stabilising.
U.S. stock markets ended up higher on Friday after robust results from Research in Motion and comments by Fed Chairman Ben Bernanke who said the central bank will do everything it can to stabilise banks. The Dow Jones Industrial average closed up above 8,000 for the fist time since Feb 9, up 39 points to 8,017, while Standard & Poor’s 500 index and Nasdaq Composite index also added 8 points and 19 points to 842 and 1,621 respectively.
On the data front, the Federal Statistics Office in Neuchatel said Switzerland’s consumer prices declined 0.4 percent from a year earlier in March (the most since 1959) and another report later in the day from ISM stated that the service industries in U.S. unexpectedly dropped in March, fell from 41.6 the prior month to the lowest level of the year of 40.8.
Economic data due out in the upcoming week include Japan leading indicators, eurozone PPI and retail sales data, and Canada building permits and Ivey PMI on Monday, Japan BOJ rate decision, Australia RBA rate decision, U.K. industrial production and manufacturing production, and eurozone GDP on Tuesday, U.K. nationwide consumer confidence, Japan trade data, economic watch DI and BOJ report, German trade balance and factory orders, and Canada housing starts on Thursday, and Japan BOJ minutes and U.S. Fed budget on Friday. Major markets will be closed next Friday due to ‘Good Friday’ Holiday.