*** Currency Market Analysis 06/09/2013 ***

[The Machine]

The U.S. dollar steadied near seven-week peaks against the euro and a currency basket on caution ahead of America’s big jobs report for August. Investors are cautiously optimistic about the latest jobs survey following solid readings this week on manufacturing, weekly jobless claims and growth in services businesses. Forecasts expect a gain of 180,000 non-farm payrolls when the report prints at 8:30 a.m. ET. A number near or above forecasts would bring a reduction in Fed stimulus a big step closer to reality and support the greenback. The next Fed decision is less than two weeks away on Sept. 18.

Though steady against most rivals the U.S. currency lost ground to the yen and growth currencies from Canada and Australia. Currencies with close ties to global growth have outperformed this week thanks to better data from the U.S. and abroad which has bolstered optimism about the health of the world economy. The rise in Canada’s currency put it at two-week peaks against the greenback, a head start lead that partially stemmed from hopes that the country’s monthly jobs report will show a rebound in hiring in August. Forecasts expect a gain of 20,000 jobs for August, a modest amount that is expected to keep the jobless rate at 7.2%.

 

EUR

A woozy euro held near seven-week lows, still nursing wounds suffered the previous session by a dovish area central bank and positive U.S. data that bolstered the Fed taper narrative. The European Central Bank (ECB) vowed anew Thursday to keep rates biased lower for a long time to shore up an economy that recently emerged from recession. Officials even discussed lowering borrowing rates at this month’s meeting which highlighted the ECB’s decidedly dovish stance, one that contrasts expectations for the Fed to shift away from its super low rate polices. Euro bears today would likely pounce on a U.S. jobs report that speaks better about the state of the labor market and suggests the Fed could taper stimulus in less than two weeks when bankers next announce a decision on Sept. 18. The euro today found another weight in a report that showed German industrial output fell 1.7% in July, compared to forecasts of a 0.5% decline.

 

GBP

Sterling was south of the two-week high it touched Thursday against the greenback with investors abstaining from placing bets until they get a look at today’s U.S. jobs report. Meanwhile, a batch of lackluster U.K. data on factories and trade also didn’t help sentiment toward the pound. Industrial output was unchanged in July versus expectations for a modest gain. Britain’s trade gap swelled more than expected to £9.85 billion in July from a revised shortfall of £8.17 billion in June. Key for the pound next week will by the latest snapshot of Britain’s job market, seen as the key to the outlook for local central bank policy. Monthly jobless claims and unemployment come due on Wednesday.

 

JPY

The yen rebounded from the prior day’s six-week low against the greenback as investors squared positions ahead of today’s all-important U.S. jobs report. Better data this week from the U.S. on manufacturing, jobs and services firms have pushed up U.S. interest rates, making the greenback a more alluring bet compared to the lower-yielding yen. A U.S. jobs report that doesn’t disappoint would tend to keep upward pressure on U.S. yields and underpin the greenback.

 

CAD

Canada’s dollar rallied to new two-week highs after local jobs figures surpassed expectations while weaker than expected hiring in the U.S. raised doubts about a September tapering of Fed policy. Canada added 59,200 jobs in August, roughly three times more than the expected increase of 20,000. That helped push Canadian unemployment down a notch to 7.1%. Most of Canada’s hiring, though, came from part-time positions, which tend to be lower paying and have a limited impact on spending.

 

USD

A mixed jobs report that showed slower than expected hiring and downward revisions to June and July threw a wet blanket on both the dollar and prospects for the Fed to scale back stimulus on Sept. 18. Nonfarm payrolls rose 169,000 in August, below forecasts of 180,000. Unemployment fell to 7.3%, the lowest in more than four-and-a-half years. A smaller workforce was seen behind the fall in the jobless rate. Today’s OK but not spectacular jobs report suggested that any Fed stimulus taper in September might be more of an incremental or baby step.

 

[Dinar Buddy]

GREAT Stuff - Could also include the IQD in your postings...

[The Machine]

GREAT Stuff - Could also include the IQD in your postings...

 

well there is never much to say about the IQD, it's still an exotic currency it's not traded heavily and is still pegged to the dollar.