Stock Market Watch

Forex Market Update: U.S. Dollar Pares Initial Weakness after Jobs Data

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The U.S. dollar traded broadly lower during European trading hours on Friday as investors remained edgy ahead of the Labor Department’s monthly non-farm payroll data.

However, the U.S. dollar pared losses after the Labor Department’s non-farm payrolls data showed that the U.S. economy added 165,000 new jobs in April while economists were expecting 135,000 new job creations.

Had the non-farm payroll data showed weakness then the U.S. dollar would have come under more pressure. A weak data would have added concerns over the outlook of the U.S. economy which in turn might even prompted the Federal Reserve to provide more economic stimulating measures.

“If we have a weak number, expectations will grow for the Fed to act,” said Geoffrey Yu, currency strategist at UBS, according to Reuters.

Already, the Federal Reserve is buying $85 billion worth bonds every month even as the benchmark interest rate remains near record low levels.

At last check, the euro fell 0.14% to $1.3047 while the pound sterling plunged 0.29% to $1.5489.

Earlier today, the ICE dollar Index, a gauge on U.S. unit’s performance against a basket of six major traded currencies, fell 0.25% to 82.029.

Among all currencies, the U.S. dollar’s biggest plunge was against the euro. Although the European Central Bank on Thursday slashed its benchmark interest rate by 25 basis points to 0.5%, which is record low level, it held steady against rival currencies.

The euro gained after the ECB policymaker Ewald Nowotny said that the market was wrong in deducing about potential negative interest rate in the currency bloc following yesterday’s comments from Draghi.

 

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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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