News Financial

Non-farm payrolls

The dollar pared its losses against the euro and yen after a report showed enough jobs were added in private sector, lifting expectations on tomorrow’s non-farm payrolls.

ADP report showed there were 40k jobs added in December, following a revised 179k increase in the previous month. The message this figure delivered to us is two-folded. First, the labor market had peaked and started to cool down. Secondly, there is no sign of a contraction given enough new jobs created.

The dollar is trading in a narrow range above 1.47 versus the euro, and bounced back to low 109 from the session low at 108.24 versus the yen.

The dollar slumped across the board after a government report showed job growth slowed to the lowest since 2003, raising the likelihood that the Fed may cut interest rates by the end of this month.

Non-farm payrolls fell sharply from 94k to 18k in December, far below the estimate of 70k. Unemployment rate increased from 4.7% to 5.0%, above the estimate of 4.8%. Average earnings dropped from 0.5% to 0.4%. The surprisingly weak job report added to worries that the nation may head to a recession. The dollar tumbled to above 1.48 versus the euro and dipped below 108 against the yen after the release of the job report.

The gain in the sterling versus the dollar was limited as the Bank of England is seen to follow the monetary policy of the Federal Reserve and cut rates further this year.

diposkan oleh news financial @ 08:47