Stock Market Watch

Forex Market Update: Dollar Broadly Lower After Weak Jobs Data

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The U.S. dollar traded broadly lower after the Labor Department non-farm payrolls data showed that the U.S. economy added fewer-than-anticipated jobs in August, fanning speculation that the Federal Reserve might wait little longer before its starts to squeeze its economic stimulating measures.

The Labor Department said that 169,000 payrolls were added in August against economists’ expectation for 180,000 new job creations. Meanwhile, the job additions for June and July were downwardly revised by combined 74,000. The unemployment level slipped to 7.3% from 7.4%

At last check, the Dollar Index, a measure on U.S. unit’s performance against a basket of six major currencies, fell 0.34% to 82.35.

The WSJ$, which uses slightly broader indexing criteria, edged down 0.47% to 74.39.

The Fed’s current round of quantitative easing (QE3) is explicitly tied to an improvement in the U.S. labor market. The Federal Reserve is expected to hold its next open market committee meeting (FOMC) on September 17-18 and the market sentiment is likely to remain wary until the policymakers clears the ambiguity over QE3 tapering.

“Although the unemployment rate was lower, there were negative revisions of 74,000 and that has pushed both U.S. yields and the dollar lower,” said Kiran Kowshik, currency strategist, BNP Paribas, New York, according to Reuters.

Kowshik added that the bank believes the Fed will start tapering from December given the fact that this downward revision came after several months of upward revisions.

Against the euro, the dollar was last down 0.19% to trade at $1.3144 while against the yen the dollar fell 1.00% to trade at 99.11 yen.








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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