Dollar Strengthens On Employment & Services PMI Reports

The US currency rose today against the euro and the Japanese yen after the reports showed that the US employers added more jobs than expected and the service industries expanded with increasing pace.

The US non-farm payrolls increased by 42,000, as was reported by ADP Employer Services. The median forecast was the 38,000 growth. The non-manufacturing sector grew in July for the seventh consecutive month, as was shown by the non-manufacturing index, which registered 54.3 percent in July, compared to 53.8 percent registered in June. The figure above 50.0 indicates industry expansion, below indicates contraction.

The employment was the one of the main sources of concerns for the US citizens. Therefore, the good news from the labor market improved the outlook for the US economy significantly. The Federal Reserve acknowledges the slowdown of the economy, but may refrain from adding more stimulus after the reports suggested that the US economy is healthier than it looked previously.

EUR/USD traded near 1.3137 as of 17:13 GMT today after it opened at 1.3229. USD/JPY rose to 86.22 from 85.76 after slumping as low as 85.32.

If you want to comment on the US dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

Dollar Sinks On Decreasing Payrolls

The US dollar slumped today after the US non-farm payrolls sank more than expected, suggesting that the Federal Reserve would require to perform additional stimulus measures to support the nation’s economy.

The non-farm payrolls tumbled by 131,000 in July, following the 221,000 drop in June. The median forecast was the 63,000 decrease. The unemployment rate remained at 9.5 percent. The Dollar Index slid 0.8 percent to 80.153, after touching 80.085, the lowest level since April 14th, and is heading for the ninth consecutive weekly loss.

The comment of Lauren Ros borough, the senior currency analyst at Westpac Banking Corp., was:

It solidifies the argument the U.S. is in a slowdown.“The dollar’s on the back foot at least for the next couple of days.

EUR/USD rose to 1.3206 as of 15:10 GMT today from 1.3188, while GBP/USD jumped to 1.5976 after declining to 1.5839. USD/JPY fell to 85.09, following the surge to 86.18.

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Dollar Weakens After FOMC Meeting

The US dollar fell versus the Japanese yen and also declined against the Great Britain pound and the euro, remaining above the opening level though, after the Federal Reserve decided to keep the interest rates at the record low level.

The Federal Open Market Committee announced in its statement today:

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

It also said that “the pace of recovery in output and employment has slowed in recent months” and the household spending “remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit”, “investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Bank lending has continued to contract”.

The dovish sentiment of the Fed was passed to the investors. Not that it was very hawkish previously, considering all the bad reports in the last month.

EUR/USD fell to 1.3180 from 1.3219 as of 20:23 GMT today after dropping as low as 1.3074. GBP/USD declined to 1.5855 from 1.5892, following the decrease to 1.5709. USD/JPY dropped from 85.93 to 85.41.

If you want to comment on the US dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

Dollar Weakens As Risk Sentiment Improves

The U.S. dollar weakened today as the new home sales surged in the U.S. and the corporate earning increased, improving the appetite for the risk among the investors. The greenback fell versus most of other major currencies.

The U.S. new home sales jumped in June to 330,000 (23.6 percent) from the revised May rate of 267,000. The U.S. house market was showing the awful values previously, and this improvement, while not unexpected, is much better than the economists hoped for. The Standard & Poor’s 500 Index rose 0.6 percent after jumping more than 3.5 percent in the previous week.

The improving risk sentiment spurred the investors to the riskier currencies, decreasing the appeal of the U.S. currency. The signs of rebound in Europe’s economy helped the euro to gain versus the greenback, while the Great Britain pound rose against the dollar after all major Britain’s banks passed the stress tests.

EUR/USD rose to 1.2997 as of 17:41 GMT today after it opened at 1.2887. GBP/USD reached the highest level in three months, climbing to 1.5490 from 1.5416. USD/JPY traded at 86.94 after it opened at 87.45 and jumped as high as 87.71.

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Very Bad Week For US Currency

The US dollar performance was abysmal this week as concern about the slowdown of the US economic growth persists and even the good news weren’t able to weaken the fears. The dollar fell versus all other major currencies this month.

The manufacturing sector showed the signs of the weakness and the GDP slumped in the second quarter of 2010. It’s not surprising that the reports show that the consumer sentiment steadily declines. The Americans are also worried about their employment, despite the number of the jobless claims is decreasing.

In the environment of the uncertainty the Japanese yen thrives, rising against the dollar for the most part of the week. The Great Britain were rising for seven days, even on Wednesday, when it could go below opening level, but closed slightly above it. The euro fell on Friday, but overall the week was bullish for the 16-nation European currency.

EUR/USD rose to 1.3031 from 1.2893 this weak after reaching as high as 1.3106. GBP/USD went up form 1.5412 to 1.5689, while USD/JPY currency pair closed at 86.39 after opening at 87.54.

If you want to comment on the US dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.