Market Review – 04/03/2011 20:19 GMT
Euro rises to a fresh 4-month high despite better-than-expected U.S. jobs report
The single currency rose for three consecutive days to a fresh 4-month high in a volatile New York session on Friday as the better-than-expected U.S. jobs data could not convince investors that the Fed could raise interest rates anytime soon.
After strong rally to 1.3976 on Thursday, euro traded sideways in Asian n European sessions ahead of the much-awaited U.S. jobs report. Later, despite euro’s initial spike up to 1.4002 after the better-than-expected U.S. jobs data, price retreated briefly to 1.3940, however, renewed buying interest there lifted the single currency to an intra-day fresh 4-month high of 1.4009 b4 retreating again on cross-selling in euro vs jpy n chf together with profit-taking ahead of weekend.
U.S. non-farm payrolls increased by 192,000 in February versus the street forecast of 185,000 n the upwardly revised reading of 63,000 in January. The U.S. unemployment rate continued to edge lower to 8.9%, lowest since April 2009, fm 9.0% in January. The private payrolls rose by 222,000 in February against the upwardly revised reading of 68,000 in Jan.
The British pound was little changed on choppy Friday trading. Despite cable’s brief but sharp selloff to 1.6235 after the release of lower-than-expected UK Halifax house prices, price then rebounded strongly to an intra-day high of 1.6306 b4 gyrating inside aforesaid range in NY trading.
UK Halifax house prices showed a decline of 0.9% in Feb M/M versus the previous reading of 0.8%.
The greenback weakened against the Japanese yen on Friday. Although the dollar extended Thursday’s rally and jumped to an intra-day high of 83.09 after the U.S. jobs report, price then quickly retreated n later dropped to 82.22 on active cross buying in yen as eur/jpy, aud/jpy, gbp/jpy pairs tumbled 116.00 to 114.87, 84.00 to 83.13 n 135.12 to 133.67 respectively.
The Swiss franc strengthened against the greenback n euro on Friday due to hawkish remarks by SNB Vice President Thomas Jordan together with the escalation of violence in Libya. Although the usd/chf pair extended the corrective rise fm Wednesday’s lifetime low of 0.9202 to 0.9332 in Australia, price then fell in European morning n intra-day selloff accelerated in NY session after the U.S. jobs report, the pair eventually hit a day’s low of 0.9224 b4 recovering on short-covering. Eur/chf also tumbled fm 1.3025 to 1.2917.
SNB Vice President Thomas Jordan said in an interview with Swiss French language paper Le Temps published on Friday that ‘current interest rate level not sustainable in medium term; still watching Swiss housing market carefully; housing market situation has not become more problematic but some causes for concern remain.
Data to be released next week include :
Japanese leading indicators n Canadian building permits on Monday.
Australian NAB business confidence, Japanese current account n economic watch DI, U.K.
BRC retail sales n RICS house prices , Swiss unemployment rate, Germany factory orders,
Canadian housing starts on Tuesday.
Australian W’pac consumer confidence, Japanese machine orders, U.K. BRC shop price index n trade balance, Germany WPI n industrial production, Swiss CPI, U.S. wholesale inventories on Wednesday.
Australian unemployment rate, Japanese GDP n domestic CGPI, German Import n Export, U.K. industrial production, manufacturing production, rate decision n asset purchase target,
Canadian trade balance n import/export, U.S. Fed budget on Thursday.
German CPI, U.K. input/output PPI n PPI core, Canadian employment change unemployment
rate, U.S. retail sales , U. Michigan survey n business inventories on Friday.