The Australian dollar fell today after the jobs data came out much worse than expected, prompting speculation that the central bank cut its interest rate.
The number of people employed in Australia fell by 9,700 in August, with nothing close to the median estimate of an advance by 10,700. Reduction of July was revised from only 100 to 4100. The employment of the poor results in the unexpected increase in the unemployment rate to 5.3 percent. The bad data that spurred speculation the Reserve Bank of Australia will be forced to reduce its key rate cash has remained unchanged on 6 September for the ninth consecutive time.
AUD/USD traded near 1.0632 today as of 9:57 GMT after falling from 1.0659 to 1.0571. AUD/JPY traded at about 82.22, rebounding after it dropped from 82.34 to 81.78.
Great Britain pound fell today as Services Purchasing Managers' Index fell in August, confirming a poor state of the British economy and reduce the attractiveness of the UK currency as a refuge from the problems in continental Europe .
The services PMI fell from 55.4 in July to 51.1 in August, only slightly above the 50.0 level that indicates no change. The report says:
Respondents mostly blame a weaker underlying trend in new business and general economic uncertainty. There were some reports of riots and public disorder seen in some areas of the country in early August had negatively affected the activity.
GBP / USD fell from 1.6150 to 1.6076, after the jump to 1.6185 and GBP / JPY fell from 124.20 to 123.64 today from 14:01 GMT.
The euro fell today, dropping for the fifth straight session against the U.S. dollar and the Japanese yen after the party lost the elections gobernante Germany.
Cristiano German Chancellor Angela Merkel Democratic Union lost the elections in six German states. The election results now ignited fears that Germany will be even more instead of paying ransom money from their taxpayers. The Stoxx Europe 600 index of shares fell 2.8 percent, falling for the second straight day.
EUR/USD slipped from 1.4161 to 1.4121 and EUR/JPY fell from 108.92 to 108.56 as of 12:50 GMT today.
The Australian dollar rose on speculation that the Reserve Bank of Australia cut interest rates. Interest rate futures indicate only 20 percent probability that RBA Governor Glenn Stevens reduced the bank's main rate on 6 September. Most traders believe that is 80 percent chance the central bank kept key rates unchanged this month. Australia cash rate target rate is considered larger loans among developed nations.
Aussie's demonstration seemed unstoppable until the U.S. non-farm payrolls came out, sending markets into chaos and destruction of risk appetite to go out even worse than the most pessimistic forecasts. The Australian currency managed to stay above the opening this week, but erased the three days of gains against the dollar and the yen. Worse, it appears that the currency associated with the growth may continue to fall next week as the style of the risk aversion of thought is to return to the markets.
AUD/USD opened at 1.0583, jumped to 1.0764 and closed at 1.0641 this week. EUR/AUD slid from 1.3692 to 1.3346. AUD/JPY jumped from 81.23 to 82.81 during this week before closing at 81.71.
Forex traders that the owner of Euro want to find a safe haven in Europe's economy shows signs of slowing. The yen and the franc, the currencies being conventional insurance, are the logical choice, but under the threat of intervention. The dollar was feeling the pressure of all the potential third of the quantitative easing for some time and now, after the very unfavorable payrolls were released, intensifying the pressure. No wonder, considering all factors, some traders look at the new pounds of protection.
The problem with thinking about the British pound as the protection of Europe's problem is that Britain has its share of problems. The index of home prices nationwide fell 0.6 percent in August. The manufacturing Purchasing Managers' Index fell from 49.4 to 49.0 in August, the lowest reading in 26 months, while construction PMI fell to 52.6 in August from 53.5 in July.
GBP/USD closed at 1.6215 after jumping during the trading session from 1.6177 to 1.6253. EUR/GBP sank from 0.8812 to 0.8746 before closing at 0.8761.
The U.S. dollar fell against other currencies, including the British pound and Japanese yen today after the non-farm payrolls showed that job creation in the U.S. stagnated. The currency also fell against the euro, but recovered later.
U.S. non-farm payrolls showed no growth in employment in August. That is far worse than market expectations (growth of 74 000) and the worst reading since September 2010, when employment fell by 95,000. Average hourly earnings fell 0.1 percent, while markets had an increase of 0.2 percent. The poor economic report renewed speculation the Federal Reserve needs third round of purchases of assets, known as quantitative easing to boost the economic recovery in the United States.
The index of the dollar managed to rise 0.3 percent, to 74,683 today from 74,479 yesterday. The dollar pared losses against the pound and the yen and rebounded against the euro. The Standard & Poor's 500 fell to 2.3 percent.
GBP/USD climbed from 1.6177 to 1.6253 before trading at 1.6220 as of 19:40 GMT today. USD/JPY fell from 76.91 to 76.80 and touched low of 76.52 intraday. Meanwhile, EUR/USD tumbled from 1.4257 to 1.4199.
The Swiss franc rose today against the U.S. dollar, extending its rally for a third day, after non-farm payrolls showed that U.S. employers were not adding jobs last month.
U.S. nonfarm employment payroll in August were unchanged, while the unemployment rate remained at 9.1 percent. Analysts predict an increase in payrolls by 74,000. Value in July was revised down from 117,000 to 85,000. It will be interesting to see how the Fed will react to such disastrous economic data and what steps will be taken.
USD/CHF plunged from 037954 to 0.7811 as of 13:45 GMT today. Earlier, the currency pair reached 0.7711, the lowest level since August 12.
The South African rand fell today as the uncertainty of the forex traders on the global economy's ability to maintain demand for reducing the growth of safer currencies. Currently, however, the rand recovered.
Market participants were less inclined to believe the global economic recovery after the report from Automatic Data Processing showed on August 31 that U.S. employers added 91,000 jobs last month, less than expected reading of 102,000. Market sentiment improved slightly after the report showed yesterday that the number of jobless claims fell from 421,000 to 409,000 last week. Today we will see non-farm payrolls that must have a major impact on markets.
USD/ZAR traded near 6.9950 today as of 12:31 GMT, while previously it surged from 6.9870 to 7.0230.
The Swedish krona fell in the report showed that manufacturing contracted in Sweden last month, reinforcing the view that the central bank could cut interest rates.
The manufacturing index fell to 48.7 from 50.1 in August Swedbank in July, while the average forecast was 49.8. A reading below 50.0 indicates decreased. That was the first decline in two years.
The adverse report agree that the Swedish economy is too week to support the current level of borrowing costs, let alone to survive further adjustment. According to Credit Suisse rates the central bank cut interest rates in the next 12 months.
USD/SEK jumped from 6.3377 to 6.4127. The currency pair has recovered somewhat today, trading at about 6.3936 as of 1:45 GMT.
The U.S. dollar advanced today as the unexpected growth in the U.S. manufacturing spurred speculation the Federal Reserve will not need to stimulate the economy by debasing the U.S. currency.
The Institute for Purchasing Managers Index Supply Management "was at 56.6 in August, with little change in the July figure of 56.9. The index is expected to fall to 48.7. A reading below 50, 0 indicates deterioration and above this value indicates expansion. Positive data suggest that perhaps the U.S. economy is in a state not bad enough to justify a new round of quantitative easing.
Unemployment claims fell from 421,000 to 409,000 last week, reducing concerns about the use to some degree. Another important reason for the concerns of the Fed, the housing market, made worse because the construction cost has not increased by 0.2 percent, as promised by the forecasts, but fell by 1.3 percent.
EUR/USD opened at 1.4374 and dropped to 1.4226 before trading near 1.4259 as of 22:57 GMT today. GBP/USD fell from 1.6249 to 1.6183, while reached the intraday low of 1.6130 earlier. USD/JPY advanced from 76.64 to 76.86 and earlier touched the high of 77.24.
The Australian dollar advanced today against the euro and Japanese yen after the report showed that retail sales in July rose more than expected.
Australia retail sales rose 0.5 percent in July, while growth was 0.3 percent forecast. Retail sales fell 0.1 percent in June. MSCI Asia Pacific index gained 0.7 percent and the Standard & Poor's 500 Index advanced 0.5 percent.
EUR/AUD slipped from 1.3427 to 1.3349, while AUD/JPY climbed from 82.04 to 82.37 today as of 10:54 GMT.
The Swiss franc gained for a second day today, yesterday broke his three-day drop against the U.S. dollar and the euro, as the Swiss National Bank has announced new measures to curb the strength of the franc.
Previously, the Swiss currency was swept by speculation that the central bank parity of the franc to the euro's performance. Market participants expect the SNB would release some information about euro-or, perhaps, other measures to drain the strength of the Swiss currency. No one, traders spurred speculation that the Bank is satisfied with the current rate of the franc in relation to the euro.
USD/CHF fell from 0.8059 to 0.8001 and EUR/CHF dropped from 1.1585 to 1.1427 as of 10:38 GMT today.
The Swedish krona fell today in front of all his comrades negotiated the government cut its growth forecast for the economy, spurring speculation the central bank will not be able to increase lending rates.
Sweden cut its forecast for growth this year of 4.6 percent to 4.1 percent. The forecast for next year fell 3.8 percent to 1.3 percent. The Riksbank will announce its decision on interest rates after the meeting on 7 September.
The OMX Stockholm 30 Index, the nation's index of key shares, fell 0.4 percent. The index has fallen 13 percent this month. Arne Lohmann Rasmussen, chief currency analyst at Danske Bank A / S, said the pension fund can sell the crown after the decline of populations, so an "excellent buying opportunity."
USD/SEK climbed from 6.2926 to 6.3524 as of 21:57 GMT today. The currency pair reached the high of 6.3883 during the trading session.
The U.S. dollar managed to gain against the euro and Swiss franc today, but fell against the Japanese yen as traders left the bases mixed doubt about the prospects for the U.S. currency.
The Standard & Poors Case-Shiller index of home prices fell 4.5 percent in June from a year-over-year basis. That's a better result than the 4.7 percent decline forecast and falling 4.6 percent in May. On the other hand, consumer confidence Conference Board was far worse than forecast, from 59.2 in July to 44.5 in August, while analysts expect the index to be removed only to 52.1.
Reports of tomorrow are not good for the dollar is. The ADP employment report is expected to show slower growth of Americans employed by 102,000, compared with growth in July by 114,000. Economists say that the Chicago PMI showed a fall to 54.3 in August from 58.8 in July.
EUR/USD went down from 1.4510 to 1.4444 as of 21:05 GMT today, while intraday it touched the low of 1.4382. USD/JPY dropped from 76.84 to 76.73, while USD/CHF advanced from 0.8156 to 0.8201.
The currencies of Australia and New Zealand increased today, before falling later, after reports showed that the number of building permits in these countries increased in July.
New Zealand accepts construction rose 6.3 percent in July, after falling 4.3 percent in June. Australia accepts construction rose 1.0 percent in July, seasonally adjusted monthly after falling 3.6 percent in June. Currently, the kiwi tends to decrease, while Australia lost all its gains.
NZD/USD rose from 0.8459 to 0.8486 as of 12:57 GMT today and earlier it touched the intraday high of 0.8535 — the highest level since August 4. AUD/USD traded at 1.0644 today, while earlier it climbed from 1.0656 to 1.0684.
Previously, the proceeds from the book were mainly by investors fleeing the euro and the problems of the European Union to the UK currency is perceived as more secure. However, the macroeconomic data continuously demonstrates that the British economy has its own problems and not much better than the economies of continental Europe.
The growth of the UK economy slowed to 0.2 percent in the second quarter versus the first quarter, while growth in the first quarter of the last three months was 0.5 percent. The figures were even worse in the year-over-year basis and the expansion in the second quarter was 0.7 percent, while increasing in the first quarter was 1.6 percent.
This week is not great for the pound either. GFK Consumer Confidence Index is expected to go down slightly from -30 to -32. Views on the housing sector are mixed. While the index Halifax house prices are expected to show a monthly increase of 0.5 percent in August, compared with 0.3 percent in July, analysts predict HPI National show a slower growth of 0.1 percent this month, down from 0.2 percent in the previous month.
All in all, this week doesn’t look very favorable for the UK currency. In case of a rally, GBP/USD would find strong resistance at 1.6550 level. That was the level of resistance in May and more recently in July. The currency can find support at 1.6250 –1.6300 level as it provided strong support in the second part of July and was the recent base for the current rally. Below that the area somewhat above 1.6100 as that was the floor for the currency, when it has broke to the downside at the beginning of August.
The Russian ruble was removed after the oil has been recovered by the third day of optimism for the world economy, making Russia's currency is more interesting for investors who are willing to risk in search of higher yields.
Futures for delivery of crude oil in October rose 2.2 percent to $ 87.26 a barrel in New York. Optimism, caused by Bernanke's speech on Friday, boosted products. The positive report on personal income and spending in the U.S. was very useful. Crude oil is the main source of export earnings from Russia.
Investors bet on Russia's currency will decline in spite of some positive fundamentals. The oil can be removed if the Energy Department report tomorrow will show U.S. inventories crude oil rose last week.
USD/RUB trade near 28.7875 today as of 2:29 GMT after opening at 28.7855 and falling to 28.7765.
The South KoreThe Canadian dollar gained, reaching the highest level in over a week against the dollar, stocks and commodities rose, so the growth-linked currency attractive to investors.
The Federal Reserve, Ben S. Bernanke boosted optimism in the markets last Friday and still persists. The Standard & Poor's 500 index rose to 2.8 percent. Futures for October delivery crude oil (the main export of Canada) gained 2.5 percent to $ 87.52 a barrel in New York.
Market sentiment became even better as the report showed that personal spending in the U.S., Canada's largest trading partner, increased 0.8 percent in July compared with the average forecast 0.5 percent and falling 0.1 percent in June. The report this week by Statistics Canada is expected to show growth of Canada's gross domestic product by 0.2 percent in June after falling 0.3 percent in May.
USD/CAD traded at 0.9764 today as of 1:18 GMT after it fell yesterday from 0.9795 to 0.9767, while touching 0.9738 during the day — the lowest level since August 4. EUR/CAD fell from 1.4203 to 1.4171 on the previous trading session and traded near 1.4167 today. CAD/JPY traded at about 78.66 after rising from 78.21 to 87.61.
The South Korean won gained nowadays because the comments of the Federal Reserve, Ben S. Bernanke, on Friday increased risk appetite among participants within the Forex market, enhancing the charm of higher-yielding currencies.
Bernanke created comments on 26th August on the flexibility of U.S. to support the expansion of its economy within the long haul. The markets reacted absolutely and traders began their hunt for higher yields. South Korea's trade surplus widened to $9.94 billion in July from $2.03 billion in June.
USD/KRW fell from 1,080.10 to 1,073.50 today as of 13:46 GMT.
The South African rand met currently, reaching its highest level in additional each week against the U.S. dollar, as stocks and advanced metals, when speaking of the Federal Reserve, Ben S. Bernanke last week.
Bernanke said Friday that the Fed has recommended that to support the expansion of the U.S. economy, improved market confidence. the most stock index in South Africa rose one.7% prices the London Metal Exchange rose for the fourth consecutive day. The South African economy is administrated isn't pretty much as good, however, and lots of investors are convinced that the country's central bank might cut back interest rates.
USD/ZAR fell from 7.1300 to 7.0810 today as of 9:56 GMT and touched 7.0680 — the lowest level since August 17.
